Five Steps for Creating an Estate Plan

photo law book for creating your estate plan

What do you think about when someone talks about creating an estate plans? If you’re like most people, you assume that means they have a will. Full stop. But did you know that’s only part of the equation? Below we’ve listed five steps for creating an estate plan. 

1. Wills

Yes, wills serve as the backbone of an estate plan. Probating a will usually lacks the Hollywood drama of fainting, crying, and shouting in an attorney’s office during the reading. But without one, relatives automatically become heirs, even if you’d rather they not. Don’t want your mom to gain possession of your prized comic book collection? Ensure you have a valid will that gives them to your comic-con buddy. 

2. Beneficiaries

More than just who gets what in your will, you also need to name beneficiaries on all life insurance, retirement plans, and other assets. Spouses with joint ownership of assets – like a house – will automatically inherit the asset, so long as the deed reflects this. Also, revisit these beneficiaries periodically, especially after a large life change. I hate explaining to a deceased’s wife that the ex-wife inherits the insurance money because he never updated his policy beneficiaries.  

3. Memorandums or Letters

Not everything will be captured in a will. Some sentiments require additional explanation. For example, some people want to dictate every aspect of their funeral, including what songs to play during the service. We recommend these individuals write everything down in a document colloquially called a Memorandum of Death. Maybe that sounds creepy, but if you feel strongly about NOT playing Amazing Grace at your funeral, better record it. This also works for making sure the right people receive sentimental items with an explanation of why.

4. Power of Attorney 

No one wants to think about losing their facilities and not being able to make their own decisions. But if you plan to live a long life, the odds favor those with a durable power of attorney (POA). With a POA, a trusted individual can advocate for your financial affairs. They will act on your behalf to pay bills and disperse your funds according to your wishes. PS: it’s not always a relative who serves in this role.

5. Declutter your files

Grieving loved ones don’t need additional obstacles to closing a deceased’s affairs. Nobody wants to sift through losing lottery tickets, old magazines, and canceled checks to desperate need to find your estate plan and other important paperwork necessary to file for probate in the courts. Don’t be “that guy” that keeps everything in a grocery bag in the back of the hall closet. Organize your stuff. 

Ready to make sure your estate plan needs your needs? Relax! Call our office at 724-216-5180 or complete the online form to schedule a free consultation.  

Reminder: You Need a Will

you need a will, especially during uncertain times

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Expecting an Economic Impact Payment? Five Reasons to Check Again

a graphic of money depicting why if you're expecting and economic impact payment, there are five reasons to check again.

The much-anticipated economic impact payments have started rolling out across the nation. If you’re expecting an economic impact payment, you may be waiting expectantly. Americans eligible for the payment check their online banking statements like kids on Christmas looking to see if Santa came. Those receiving paper checks will have to wait weeks more.

Tens of millions of Americans will receive their payments without issue. Well, this is the federal government, we know there will be glitches and delays. Aside from the usual red tape, the CARES Act has a few loopholes that could eat into that Christmas morning miracle.

1. Child Support Arrears

Anyone who owes child support can have their checks fully or partially garnished like their wages. Note: married couples where one spouse is behind on child support from a previous relationship can see their payments garnished, too. That’s right, the current spouse could see some or all of their portion taken as well.

2. Private Collection Agencies

Currently, anyone in collections may also see those funds diminished. Debt collectors can freeze bank accounts, too. If this feels sneaky and underhanded, there are a number of senators who agree. They’re working with both the Treasury Department and states to close this loophole. But for now, it’s still perfectly legal.

3. Parents of Teens Over 16

As is true of regular tax filing, the child tax credit cuts off by at a kid’s 17th birthday. This may come as a big surprise when you’re counting heads around your dinner table. The IRS doesn’t count older teens as dependents eligible for the $500 dependent payment, regardless of how much they cost you in groceries.

4. College Students Still Claimed by Someone Else

College students under the age of 23 that are still claimed by someone else are not eligible to receive payments. Those claiming them as dependents will likewise not receive funds for claiming them as a dependent child. This is true even if the student lives on their own and has a part-time job while going to school. 

5. Disabled, Elderly or Otherwise Dependent Adults

Adults claimed by someone else for tax purposes are not eligible to receive a payment. Neither are their caretakers – including adult children – able to claim them as dependents for the $500 payment. 

The government’s economic impact payment program has additional holes, creating even more questions. The IRS is notoriously difficult to get answers from. This is especially true now with a skeleton crew pumping out unprecedented checks to tens of millions of people on antiquated computing systems. Figuring out the CARES Act and how loopholes affect your payments could require a more trained eye. If you’re expecting an economic impact check and need help, call our office at 724-216-5180 or complete our online form.

Common Tax Filing Mistakes

A graphic depicting tax filing materials

Whether you file your own taxes or work with a professional preparer, there are a few common mistakes you must avoid. Some could even delay your receipt of your funds from the CARES Act. You may laugh at these common tax filing mistakes below… unless you make them. 

Misspelled or different given names

If you ever took the SATs in high school, you may recall you got 200 points just for spelling your name right. There’s a lot more riding on spelling correctly and using your legal name now. Even if you hate your legal name, you’ll love the refund attached to it. The same goes for anyone who legally changes their name (ex: marriage, divorce, for fun). Whatever name the Social Security Administration has on file, use it on your tax paperwork.

Direct Deposit Errors

It’s more secure to request a direct deposit of a refund than having the IRS mail you a refund check and you receive your cash WEEKS earlier. However, the danger lies in making sure those digits are correct when you provide them. Errors in routing or account numbers could see your refund heading to another person’s bank account. The funds could also be returned to the IRS, delaying your receipt of your hard-earned cash. 

Side Hustles and Investment Earnings
Did you receive a 1099 for contract work last year? Guess what, you need to claim this on your taxes (yes, the IRS knows about it since the client sent a copy of your 1099 to them, too). Likewise, if you received funds from investments, you must claim this as income. If you “forget” about either of these, the IRS will remind you. Unfortunately, these reminders tend to include a penalty and interest on unreported income taxation.

Qualified Charitable Distributions

Make sure you adhere to the charitable donations guidelines posted on the IRS site. Bonus: If you’re an avid reader of my blog – and of course you are – we recently discussed a number of tax tips for filers over age 50. One of those tips offered advice for individuals who must take required minimum distributions from Traditional or Roth IRAs. By donating the full amount to charity, you exempt that income from taxation. 

With the IRS extending filing dates to July 15, you have time to ensure your information is complete and correct. Our office can help ensure you stay in good graces with the IRS. We can also find additional avenues for you to pay the lowest taxes possible while staying in compliance. To learn more, call our office at 724-216-5180 or use our online form.

9 Tax Tips if You’re Over 50

A photo of a person doing their taxes: discussing 9 tax tips if you're over 50

Taxes probably rank pretty low in order of importance right now during the coronavirus pandemic. Timing when to file could work to your advantage if you have concerns about income, especially if you consider these 9 tax tips you may overlook if you’re over 50. 

If you anticipate getting a refund, adhering to the April 15 deadline will get your refund to you more quickly. If you may owe the IRS, I suggest filing as soon as you can but holding out until July 15 to pay what is due. Keep that cash longer in your pocket instead. 

When you do file, finding every possible avenue to decrease your tax liability is all the more important this year. To help, check out these lesser known tax tips for anyone age 50 and older.

1. Catch-Up Contributions to 401(k)

Contributing to your 401(k) maxes out each year for everyone. In 2019, that limit was $19,000 until the age 50. From that point on you can contribute an additional $6,000 as “catch-up” in preparations for retirement for a total annual contribution of $25,000. 

2. Catch-Up Contributions to Traditional or Roth IRAs

Likewise, if you’re age 50 or older, you can also contribute an additional $1,000 to either for a total of $7,000. The underage set can only sock away a total of $6,000. By the way, you must withdraw required minimum distribution (RMDs) by age 70.5. BUT, if you donate that amount to charity, you don’t have to pay a dime of taxes on it. However, if your 70th birthday is July 1, 2019 or later, you do not have to begin your RMD until the age of 72.

3. Health Savings Account Contributions

It’s a fact of life. The older we get, the greater the likelihood we will need increased care. HSAs provide a tax-deductible way to save for these inevitable expenses, allowing single taxpayers over the age of 55 to put away $4,500 and $8,000 for families. 

4. Drawing down Cash from 401(k) Retirement Funds

If you’re over the age of 59 ½ (yes, we start counting half-birthdays from here on out), congratulations! You’ll no longer pay a 10 percent penalty for withdrawing funds from your retirement accounts. Bonus: among various exceptions to the 10 percent penalty, if you’re over the age of 55 and leave a job, you can start receiving distributions immediately from your 401(k).

5. Lifelong learning credits

While not only for the 50+ crowd, the Lifetime Learning credit can be claimed for you or your spouse for more than four years. The credit, worth up to $2,000 annually, can be claimed for education expenses that lead to new or improved skills. Again, this credit has modified adjusted gross income restrictions, phasing out between $58,000-$68,000 for singles and $116,000-$136,000 for married couples.

6. 529 Education Plans

Similarly, grandparents can finance education costs for their grandkids and score a tax break for 529 plans. Once meant only for eligible colleges and universities, 529 plans now cover K-12 expenses for any public, private or religious institution.

7. Increase you Standard Deduction

If you’re over the age of 65, you automatically qualify for a larger standard deduction. How much? The standard deduction in 2019 for those over age 65 increased by $1,650 for single households; if you and your spouse file jointing and are both over age 65, you can add a total of $2,600. (Caveat: your standard deduction could be reduced is someone else claims you as a dependent.)

8. Medical and Dental Expenses

If your unreimbursed medical bills account for more than 10.0 percent of your adjusted gross income – and you itemize your deductions – you may be able to deduct some or all of those expenses. This also applies to buying long-term care insurance, which, depending on your age, could add up to more than $5,400.

9. Tax Credit for Elderly or Disabled Care

Finally, you may qualify for the tax credit for the Elderly or for the Disabled. To qualify, you must either be 65 or older or retired on permanent and total disability with taxable disability income. A reminder: this credit as strict income limits.

Of course, this list of tax tips provides just a sampling of the many additional perks of being a “Boomer.” The IRS helpfully offers this “simple” guide to understanding all the tax breaks for older Americans. Our office can help break down the guide for you and find additional avenues to pay the lowest taxes possible. To learn more, call our office at 724-216-5180 or use our online form.

How will taxes affect your business strategy?

If you’re a business owner, you know that every decision affects your business in myriad ways. With tax season in full swing, these aspects are likely (or should be) on the forefront of business owners’ minds. So, how will taxes affect your business strategy this year?

Informed Decisions

For example, finance and business strategies often fail to consider the role of taxes during the decision-making process. This is especially true of plans for small businesses. Effective business planning means accounting for every possible impact of a transaction on the overall health of a business. Owners must factor in all tax and non-tax costs into final decisions by reviewing their Strengths, Weaknesses, Opportunities and Threats. Anyone familiar with SWOT analyses knows that the entries that populate the classic project planning quadrant for decisions have far-reaching, and often unexpected implications.

At least partly, taxes affect your business strategy because of the implications of a move. Whether forming a business, raising capital, expanding or divesting business, taxes have a direct impact on cash flow. Taxes can divert as much as 40 percent of a business’s pretax cash flow to the government. Planning accordingly for these implications can prevent a business owner from being caught “flat-footed” and finding themselves deep in the red with the IRS. 

Whole fields devote study to taxes and business strategy. Every business school worth its weight in saIt offers a full program on considering the taxes, accounting and financial trade-offs involved in strategic planning. I won’t attempt to surpass thought leaders like Scholes, Wolfson and company (google them); however, there’s a reason their classic text, Taxes and Business Strategy, and others after have been so popular. The complexity of the tax code, coupled with how it can impact a business’s future plans, requires expert eyes. A true analysis takes a holistic approach to decision-making. 

Tax Structure

Business owners need to consider both explicit taxes (tax dollars paid directly to taxing authorities) and implicit taxes (taxes paid indirectly as lower before-tax rates for overall return on investments). I cannot stress how important it is to have a team of experts review any business deals before finalizing them. Experts in these fields can potentially save your business tens of thousands of dollars in the long run. 

Let’s say you receive the green light for moving forward with a proposition. Your next goal should be to minimize the amount of tax revenue the IRS makes off your transaction. Certain structuring can help you lower your tax bill while staying in compliance. 

If you’re considering more complex maneuvers, you need a tax attorney to help you navigate processes. This includes converting ordinary income into capital gains that are subject to lower tax rates or completing legal moves that shift transactions and tax consequences. 

With extensive experience in tax preparation and tax law, we’ve helped our clients save thousands of dollars in federal taxes. We can help you pay the minimum amount of taxes possible while still being in compliance with federal tax law. If you have questions or would like to schedule a consultation discuss your specific needs, call our office at 724-216-5180 or use our online form.

Business Tax Preparation 101: 5 Tips to Make Filing Easier

a grid of with photos of taxes, money and John Cochran, who provides business tax preparation 101: 5 tips to make filing easier

Tax season can be a tough time for everyone getting ready to file their tax returns. Even with a basic W-2, there is a lot of additional paperwork that can go with filing. If you’re a business owner, the entire process gets that much more complex. Get organized to help tame the annual beast. I advise all my clients to get their stuff together as soon as possible. Consider this my Business Tax Preparation 101 course.

Need help getting started? Follow these 5 things you can do to make your life (and your tax preparer’s) easier: 

1. Get Started Now

Allow plenty of time to find all your receipts, invoices and statements. Pull everything together into one place so that when we start to go over material, you can readily pull out the correct paperwork to keep moving. Also, schedule your appointment for preparation as early as possible. Taxes aren’t (or shouldn’t be) something you cram the night before the deadline.

2. Want to Save Money? Do the Legwork

Having a CPA or tax attorney prepare your taxes is an expensive, but necessary expense for business owners. If you want to cut costs, don’t skimp on the quality of the preparer. Instead, do as much of the prep work as possible before you hand over your material. This way you only get billed for high-value hours. That means adding up your expenses and revenues BEFORE you get to the office. 

3. Ask Questions Ahead of Time

Much like adding up your receipts on your own, do research on what is considered a qualified write-off before you come to your appointment. A quick review of Business Expense Deductions on the IRS site can help. If you’re still unsure about something, call and ask your tax preparer questions ahead of time so you have all the information you need at your fingertips.

4. Former tax problems? Self-Disclose Now

I don’t like surprises. If you already owe money to the IRS, received a letter from them, or are currently under investigation, don’t try to hide this because of embarrassment. Be up front before we get started, it’ll save us both a lot of heartache (and you a lot of money) down the road. As a tax attorney, knowing you have a problem, I’d  approach your current tax responsibilities much differently – and focus on the bigger problems at hand – than I would otherwise. 

5. File for an Extension

I personally hate dragging out processes, but sometimes things happen. You may have an upcoming hearing, a large change in income on the horizon, or a very busy quarter preventing you from filing on time. There is no penalty for filing for an extension, IF you do it on time. If you fail to file, you could be facing hefty fines and penalties, compounded by interest.

With extensive experience in tax preparation and tax law, we’ve helped our clients save thousands of dollars in federal taxes. We can help you pay the minimum amount of taxes possible while still being in compliance with federal tax law. If you have questions or would like to schedule a consultation discuss your specific needs, call our office at 724-216-5180 or use our online form.

CPA or Tax Attorney: Which is Right for your Business?

a photo of a business card holder for John Cochran. Decide whether you need a CPA or tax attorney for your needs.

Say you own an independent business or need someone to offer tax code or legal advice on a specific situation. You know already you need someone with more experience than your typical tax preparation consultant. But should you hire a certified public accountant (CPA) or retain a tax attorney? Who you go to is largely determined by your specific needs. 


For most tax preparation questions, a CPA serves as a logical resource. They understand complex tax situations and compliance of federal laws. A CPA has far more experience than someone at a tax preparation booth in a big box store during tax season. They have earned advanced business degrees. They’ve passed intensive CPA exams. And they complete 80 hours of continuing education every two years. While a CPA is more expensive than the tax preparation consultant you see annually, you build a professional relationship with them. And they will know your business and understand how fluctuations or new tax clauses can affect you and your long-term financial plans. For many, this ongoing relationship provides all the tax support they need. 

Tax Attorneys

Tax attorneys, on the other hand, are legal professionals with law degrees specializing in tax law. A tax attorney has matriculated from a law school and sat for the bar exam. Their expertise is in tax controversy and dispute resolution. Tax attorneys help with especially complex personal or business tax matters. They are invaluable if you have serious tax problems involving negotiations with the IRS or if you are implicated in tax fraud. Tax attorney training prepares them to defend their clients against adverse tax actions. They also will represent their clients during IRS proceedings. 

An important point to note: while both a CPA and tax attorney will look out for your best interests with the IRS, only a tax attorney is bound by attorney-client privilege. Nothing shared with your tax attorney will be admissible against you during negotiations on your behalf without your consent. A CPA will need to disclose information to regulatory bodies outside of the IRS, in private civil matters, or in criminal tax matters. 

How we can help

With extensive experience in complex tax matters, I focus on tax compliance and minimization and resolution of tax controversies. Although I hold a J.D and a master’s degree in taxation, for many years I worked as a CPA. This allows me to interact more closely with accountants and financial professionals while offering insights that only an attorney can provide. I provide an enhanced level of legal advice, right in Greensburg, at lower rates than firms in downtown Pittsburgh. My combination of experience provides a one-stop shop for my clients on everything they need to survive this tax season and ghosts from fiscal years past. 

Interested in learning more? To schedule a free consultation, call our office at 724-216-5180 or use our online form.

How Will Your Business Benefit from the SECURE Act?

In the twilight of 2019, President Trump signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act that took effect January 1, 2020. So, how will your business benefit from the SECURE Act?

At its core, the SECURE Act means to encourage increased retirement savings. And it provides a number of paths for individuals to do so. It has pushed back timelines for contribution and required distributions. Now, part-time employees can participate in employer 401(k) plans if they meet certain stipulations. And it includes a host of other enhanced saving opportunities.

Small Business Retirement Plan Tax Credits

While the majority of Americans save for retirement through a work-based plan, employees at small businesses largely could not. Nearly 75 percent of workers at companies with fewer than 100 employees could participate in an employer plan in 2017. Small business owners have rightfully cited startup costs and administrative burdens as hurdles to offering plans. 

To address these issues, one less publicized provision of the SECURE Act is a massive increase in the small business tax credit. This credit covers the costs of the first three years an employer offers a workplace retirement plan. Originally, the tax credit covered $500 a year for up to three years. However, the new provision now allows up to $5,000 a year (for a total of up to $15,000 over three years). There are also increased credits available for employers who require their workers to automatically enroll in their company’s retirement plans. 

Multiple Employer Plans for Retirement

Perhaps most importantly though, a part of the SECURE Act now allows small business owners the ability to band together to create Multiple Employer Plans (MEPs). MEPs pool small business resources to offer workplace retirement plans easier to administer. They are also more cost effective for their owners. This also includes an annuity option for existing retirement plans, which previously could only be taken as a lump sum for taxation purposes.

Why does this matter? If you want to attract the highest quality employees for your open positions, you must offer plans that increase the allure of working for you. A 2019 study by the Society for Human Resource Management, ranked retirement benefits second in importance (after health care). This accounted for all the benefits that employers offer. 

The new law comes with a variety of updates and procedures. We can help you realign your business practices today to start capitalizing on its benefits. Whether you’re a small business owner or an employee contributing to a work-based plan, we can help. 

Want to learn more on how these and other portions of the SECURE Act affect your taxes? Contact our office at 724-216-5180 or use our online form to schedule a consultation.

Ready to Sell Your Company in 2020? Read this First

a photo of a business for sale

Congratulations! You made a decision to pass your company’s legacy onto someone else. Perhaps a child or a likeminded stranger will take the reins, leaving you free ride off into the sunset of retirement. Or onto your next business venture. 

Of course, the IRS will tax you on the profit you make from the sale. As you prepare for this transition, minimize your tax responsibilities by considering a number of implications. Without proper guidance, you could end up paying nearly half of your sales price in taxes. 

Tax Rates

Different tax rates apply depending on whether proceeds of the sale are taxed as ordinary income or capital gains. When you sell a business, you want to maximize the amount of sold assets categorized as capital gain. Buyers, for their own taxes, prefer to allocate as much of the contract sales price as ordinary income to the seller.  

Like most business deals, subtle negotiating happens between the parties over the ratio of capital gains versus ordinary income. Usually, this results in a settlement that makes neither party happy, but both can live with.

Additional intricacies to consider include whether the sale is an all-cash deal or requires payment installments. Also consider whether you the sale includes assets or stocks. Finally, determined if the sale can be treated as a tax-free corporation (if between two corporations). 

Prepare before Negotiations

Before you begin negotiations to sell your company, contact a law firm that specializes in tax law. I have provided tax services to businesses and individuals for many years, including advising on timing and characterizations of transactions. . Beforehand, I worked as a licensed certified public accountant and earned a master’s in taxation. Contact our office at 724-216-5180 or use our online form to see how we can help you.