Armstrong & Getty On Demand: Episode Summary

Episode Title: He Loves Talking Taxes! Steve Moskowitz Talks to A&G
Release Date: February 24, 2025
Host: Armstrong & Getty
Guest: Stephen Moskowitz, Founder and Tax Attorney at Moskowitz LLP

In this engaging episode of the Armstrong & Getty On Demand podcast, hosts Armstrong and Getty dive deep into the often-overlooked world of tax laws with their longtime friend and expert tax attorney, Stephen Moskowitz. Known for his infectious enthusiasm about taxes, Stephen unpacks a variety of tax strategies and recent changes that can significantly impact both individuals and small business owners. Here’s a comprehensive summary of the key discussions, insights, and conclusions from the episode.

1. Introduction to Stephen Moskowitz

The episode kicks off with a warm welcome to Stephen Moskowitz, emphasizing his passion for tax law. Armstrong expresses admiration for Stephen's excitement about his field:

Stephen Moskowitz (00:22): "I'm fantastic. And you know, I'm happy because I get to talk about taxes. And you know, I mean that."

Armstrong (00:28): "I have never known anybody who's more excited about their jobs than you are. Stephen, you love helping people deal with taxes."

Stephen's enthusiasm sets a positive tone for the episode, promising listeners valuable insights into maximizing their financial strategies through savvy tax planning.

2. The Augusta Rule (Internal Revenue Code Section 280A(g))

Stephen introduces listeners to a fascinating provision in the tax code known as the Augusta Rule:

Stephen Moskowitz (00:50): "There's so much in the tax law, there's so many hidden gems... For example, I have a question for you. Suppose I told you that you could go on a two-week vacation anywhere in the world you choose. Some stranger would pay for it and the money the stranger gives you is tax-free. How would you like that?"

He elaborates that under Section 280A(g), homeowners can rent out their personal residences for up to 14 days per year without reporting the rental income on their tax returns. This means the rental income is entirely tax-free, providing a unique opportunity for homeowners to earn extra income effortlessly.

Stephen Moskowitz (01:29): "...you went ahead and let's assume that you rented your house for $1,000 a day. So it's $14,000. You go off to Hawaii, you spend $10,000 on your trip. That 14 grand that you got is tax-free. It's excluded from income."

This provision is particularly beneficial for those in high-demand rental areas or seasonal tourist destinations, allowing them to monetize their property without the usual tax implications.

3. Maximizing Retirement Plans for Small Businesses

A significant portion of the discussion centers around retirement planning, a crucial yet often neglected aspect for small business owners and entrepreneurs.

Stephen Moskowitz (03:42): "Oh, the first one is retirement plans. There's over 20 different types of plans... you can have multiple plans in the same year and you can put away so much money."

Stephen highlights the multifaceted benefits of retirement plans, emphasizing tax deductions, tax-deferred growth, and protection from lawsuits.

• Tax Benefits: Contributions reduce taxable income, and investments grow tax-deferred.
• Asset Protection: Funds in retirement accounts are typically protected from creditors.
• Flexible Deadlines: Unlike regular deductions, retirement plan contributions can often be made up until the tax filing deadline, providing flexibility in financial planning.

He also introduces advanced concepts like "fancy plans" that allow for significantly higher contributions based on age and earnings, making retirement planning not just a safety net but a strategic financial tool.

Stephen Moskowitz (05:33): "Absolutely, absolutely. And again, with retirement plans, there's so much in there... Everybody should have a pension plan. Everybody should put that away."

4. Electric Vehicle Tax Credits

Addressing environmentally conscious listeners, Stephen discusses the tax incentives available for purchasing electric vehicles (EVs):

Stephen Moskowitz (07:25): "Suppose somebody says, 'I'd like to have an electric vehicle.' Well, guess what? The government will give you $7,500. And you say, 'Well, that's nice. I can go ahead and take $7,500 off my tax return.'"

He further explains innovative dealer programs where the tax credit can be directly applied to reduce the purchase price of the vehicle, streamlining the benefit for consumers without necessitating out-of-pocket expenditure followed by reimbursement.

5. Opportunity Zones: A Lucrative Investment Strategy

One of the standout segments covers Opportunity Zones, a powerful tool for investors seeking tax deferral and reduction on capital gains.

Stephen Moskowitz (08:57): "What is an opportunity zone? There are designated areas in our country where the government says, invest here and we'll give you special tax benefits... if you hold this property for more than 10 years, when you sell it, there's zero capital gain."

Opportunity Zones encourage investment in underserved communities by offering significant tax incentives. Stephen illustrates this with an example where an investment growing from $1 million to $100 million within an Opportunity Zone results in zero capital gains tax, provided the investment is held for over a decade.

Stephen Moskowitz (08:59): "...there's a special provision that if you hold this property for more than 10 years, when you sell it, there's zero capital gain."

This strategy not only benefits investors but also fosters economic growth and development in targeted regions.

6. Recent and Upcoming Changes to the Tax Code

Towards the end of the episode, Stephen sheds light on recent modifications and anticipated changes to the tax laws, especially in light of the Trump administration's policies.

Stephen Moskowitz (10:22): "So I think there's going to be a lot with the Tax Cuts and Jobs Act... They're probably going to make changes and keep a lot of the things..."

Key updates discussed include:

• Standard Deduction Increases: Adjustments for inflation have led to higher standard deductions for 2024 and beyond.
• Earned Income Credit Enhancements: Families with three or more children earning under $66,819 can receive up to $7,830 in credits.
• Kiddie Tax Adjustments: Modifications that make the first $1,300 of a child’s unearned income tax-free, with the subsequent $1,300 taxed at the child’s rate.
• Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs): Increased contribution limits enhance the benefits of these pre-tax savings vehicles for medical expenses.

Stephen Moskowitz (10:22): "With the flexible spending account, here's the advantages, with the health savings account, here's the advantages... For example, with a health savings account, you get triple benefits. There's no taxes on the money you put in. It grows tax free and there's no taxes when you use it for medical bills."

Stephen emphasizes the importance of staying informed about these changes to optimize financial planning effectively.

7. Conclusion and Contact Information

As the episode wraps up, Armstrong provides listeners with Stephen's contact information for those interested in further consultation:

Armstrong (13:05): "Well, if you want to get in touch with Stephen, his number is one eight eight tax deal. That's one triple eight tax deal."

Both hosts express their appreciation for Stephen's expertise and engaging discussion, encouraging listeners to leverage the shared tax strategies to their financial advantage.

Key Takeaways:

• Leverage Hidden Tax Provisions: Understanding and utilizing provisions like the Augusta Rule and Opportunity Zones can lead to significant tax savings.
• Prioritize Retirement Planning: Implementing diverse retirement plans offers tax benefits, growth opportunities, and financial security.
• Stay Updated on Tax Law Changes: Keeping abreast of recent and upcoming tax legislation ensures optimal financial planning and maximizes available credits and deductions.
• Utilize Tax Credits Wisely: Incentives like the EV tax credit can reduce purchase costs effectively when applied through dealer programs.

Stephen Moskowitz’s passionate and detailed explanation demystifies complex tax concepts, providing listeners with actionable strategies to enhance their financial well-being. Whether you're a small business owner, entrepreneur, or an individual looking to optimize your taxes, this episode offers valuable insights that are both practical and impactful.

Connect with Stephen Moskowitz:

For personalized tax advice and to explore the strategies discussed in this episode, contact Stephen Moskowitz at:

Phone: 1-888-TAX-DEAL

This summary encapsulates the rich and informative discussion from the episode, ensuring that even those who haven't listened can grasp and benefit from the insights shared by Stephen Moskowitz.