Just a couple of generations ago, it just wasn’t polite to discuss money. We mostly knew who was rich and who wasn’t. But it wasn’t until about 1984, when crack investigative journalist Robin Leach launched Lifestyles of the Rich and Famous, that Americans began following celebrity houses, cars, and bank accounts with the same gusto as batting averages and quarterback ratings.

Today, of course, everything is different. The Forbes 400, along with local business papers, blow the whistle on executive salaries and net worths for everyone to see. Glassdoor.com lets you see how much your colleague in the next cubicle makes. And Zillow lets you (sometimes literally) peek into your neighbors’ houses and see just how much their kitchen remodels added to their value.

So, with tax season just getting off to a roll, we got to wondering how much tax professionals make? Last week, Forbes magazine dug up some data from the Bureau of Labor Statistics that show the average tax professional isn’t rolling in the sort of rock star money everyone expects!

For 2017, the average tax preparers earned $38,730. That’s actually less than the U.S. average of $44,564 for a 40-hour workweek. Of course, that figure covers a wide range, with the bottom 10% earning under $20,170 and the top 10% clearing over $81,740. Many tax preparers work seasonally, which drags down the overall average. (Fifteen years ago, “Jeopardy” champion Ken Jennings finally crashed and burned after 74 games when he couldn’t name the company whose 70,000 seasonal white-collar employees work only four months per year. The answer? H&R Block.)

Unfortunately for those who do nothing but prepare returns, job prospects aren’t especially bright. (And it’s not because the taxes themselves are going away.) Technology, which used to help preparers do their job more efficiently, is now threatening to do their jobs for them. That’s a real threat to the sort of storefront preparers who just record the history their customers bring them.

For the same period, the country’s 1.24 million accountants and auditors, whose broader responsibilities include preparing financial statements and giving actual advice, earned an average of $77,920. The bottom 10% bring in under $43,020 and the top 10% over $122,220. State averages ranged from $95,430 in New York to $59,960 in Mississippi.

Tax lawyers generally don’t prepare many tax returns. They also make considerably more than preparers and accountants, according to the website Salary Expert, pulling in an average of $145,746.

And how do prospects look for the rest of the tax industry? The Wall Street Journal recently published a report on the Tax Cuts and Jobs Act, and reported that, “many of the jobs it is creating, it turns out, are in the tax industry.” Firms are fighting for qualified employees. The paper quoted one executive as saying “There’s no doubt that the talent wars in tax have definitely heated up.” (Can you imagine talent wars in tax!)

So what should we conclude from our nosy snoop through tax salaries? It looks to us like the real news is tax pros who tell you how much you owe earn a decent income — but those who help you pay less are worth more. And in the end, isn’t paying less what you really want? So call us when you’re ready to save, and see just how valuable we can really be!

America’s economy has morphed throughout our history, starting from agricultural to manufacturing to service to technology. Now it seems we’re moving towards a celebrity-based economy. The world is full of D-list celebrities competing for attention: third-rate rappers hoping to break through their own noise, random Kardashian cousins, and spurned bachelorettes fighting for one last rose. (If you’re ever invited to compete on Dancing With the Stars, you’d better hope you were nice to people on your way up, because you’re about to see if they’ll be nice to you on your way down.)

America’s unlikeliest new celebrity is a Japanese woman named Marie Kondo, who created a mini-empire around The Life Changing Magic of Tidying Up. She’s spun the concept into a line of bestselling books, including a graphic novel, and an eight-episode series on Netflix. (No doubt there’s a line of designer-branded plastic storage bins headed to a Target near you soon.)

Now, you’re probably thinking you’ve got to squint pretty hard to find a connection between tidying up and taxes. (And you’re right . . . cut us some slack, it’s not always easy to come up with topics every week!) But once that connection jumps out, you’ll wonder why you missed it all these years.

The KonMari method starts with holding a physical object and asking yourself a simple question: does it spark joy? If so, find the right place for it, and enjoy how it adds to your life. If not, respectfully let it go. She suggests you start with clothing, because it’s easiest to discard, then move on to books, papers, “komono” (miscellaneous “stuff”), and finish up with sentimental items. Kondo even prescribes how to fold the clothes you keep — nearly a million people have watched a video of her folding socks.

Now, try this with your money — take a look at where it goes. There are plenty of expenses that really do spark joy. A family vacation, a kitchen renovation, or even a night out on the town all bring a smile to your face and make you feel good about yourself and your choices. Even big-ticket bills like your children’s college tuition spark joy as you watch them prepare to succeed in life.

But if you’re like most of our clients, your biggest single expense is taxes. Does writing those checks (or seeing them deducted from your paycheck) spark joy? Maybe at the local level. Plenty of people vote “yes” on local levies, then gratefully enjoy their schools, parks, and libraries. But very few people find joy in sending up to 40.8% of their income to Washington and watching the people in charge of spending it shut down the government for five weeks because they’re more interested in scoring points than solving problems.

Now, the world is full of tax professionals who are happy to take those W2s and 1099s that are starting to clutter up your desk right now, and assemble them into a tax return. They’ll tell you how much you owe, which is what you need. But very few of them will tell you how to pay less, which is what you want. To continue the Marie Kondo analogy, they’ll help you inventory your closet. And that’s important, because you’ll need to know where that ugly Christmas sweater is when next year’s party rolls around. But they won’t help you clean it out. Because, really, ugly sweater?

So, ready to clean up your tax bill? We’ll work through your business, your retirement, and your investment portfolio. We’ll fold it all into easy-to-pack little balls. You’ll love the feeling of zen and you might even see your blood pressure drop. So call us when you’re ready and see just how tidy we can help you get!

On January 1, we switched our calendars from 2018 to 2019. But in China, February 5 is the date for setting off fireworks. This year, we’re ushering in the Year of the Pig. The pig is the last animal in the Chinese zodiac — according to one Chinese legend, he overslept for the Jade Emperor’s great meeting of the animals in heaven. Men born in the year of the pig are optimistic, gentle, and focused. Women born in the year of the pig are full of excitement, trustworthy, and have good fortune with wealth. (No fortune cookie jokes, please!)

We’re 20ish years into the new millennium now. Driverless cars are starting to take to the streets, and Amazon is working on drone deliveries. So you might think naming a year after a barnyard animal is silly. But hey, just in the last month, Chinese scientists planted cotton on the dark side of the moon, while here in the U.S., the government counseled furloughed employees to pick up side gigs babysitting and pawn their kidneys. Who’s to say the Chinese aren’t on to something?

Naturally, the Year of the Pig got us wondering just how piggy the Peoples’ Republic gets with taxes. You’d probably expect them to be pretty high, considering the “Communists” have been running things since Truman was President. But it’s been a long time since any real Marxists have been in charge. It turns out that communism is bad for business! (Also, jokes about communism aren’t funny if everyone doesn’t get them.) So you might be surprised at just how much China’s tax system has come to look like ours.

Chinese employers withhold income and social security taxes just like here. Income taxes start at 3% on salaries up to 1,500 yuan/month (about $225) and top out at 45% over 80,000 yuan ($12,000). Social security varies from city to city, with employers generally contributing 33% and employees paying another 11%. If your only income is salary under 10,000 yuan/month, you don’t have to file a tax return.

Business owners pay 5-35% on their earnings. (What would Chairman Mao think of that?) Individuals also pay 20% on investment income and capital gains, including real estate sales. Individual tax returns are due on March 31, with extensions granted under special circumstances only. Husbands and wives file individually; there are no joint returns.

Corporations typically pay 25% on their profits. However, the World Bank reported in 2017 that China’s total corporate tax burden, including property taxes and value-added taxes, swallows about 68% of profits. And China appears to impose some indirect “taxes” that our Congress would have a hard time passing. For example, Poland and Canada have just arrested executives from telecom giant Huawei for espionage, which suggests the People’s Republic is “taxing” companies for more than just cash.

China also imposes a grab bag of value-added taxes, consumption taxes, and property taxes. Then there are “behavioral” taxes that include a vehicle and vessel use tax, a license-plate tax, a slaughter tax, and a banquet tax. (We’re pretty sure the poor piglet is jazzed about those last two.) And China is on the forefront of using facial recognition software to monitor citizens, so you’ve got to imagine they’re pretty good at rooting out tax cheats.

Americans celebrate St. Patrick’s Day by drinking Guinness, and Cinco de Mayo by drinking Corona. So why don’t more of us celebrate Chinese New Year with a Tsingtao or two? Call us any day you’re ready to pay less American tax and we’ll give you something to celebrate!

Americans love puzzles, games, and brain teasers. Newspapers publish crossword puzzles, word-search puzzles, and word jumbles. Bookstores sell jigsaw puzzles. And airport gift shops stock Sudoku puzzles to pass the hours in the sky. We love puzzles so much that someone found their way to a basement office in Washington where the Department of Bogus Holidays litters our calendars with junk celebrations like National Talk Like Yoda Day (May 21) and National Eat Your Beans Day (July 3), and made it official. And so Tuesday, January 29 will be #NationalPuzzleDay.

Most people think of puzzles as trivial diversions. But planning to avoid taxes is a puzzle, too. And, as the English economist John Maynard Keynes once said, “The avoidance of taxes is the only intellectual pursuit that still carries any reward.” So, while tax planning may not be as fun as finishing a crossword puzzle (in ink), we think you’ll agree it’s far more rewarding.

Consider the basic challenge of choosing how to organize your business. If you operate as a sole proprietor (or an LLC taxed as a sole prop) and earn $200,000, you’ll pay self-employment tax on every dime of it. On the bright side, that’s $21,836 that gets credited to your Social Security account. Of course, that won’t mean much if you don’t believe Social Security will still be there for you when you retire. (Rule of thumb: if you’re young enough to have tattoos, don’t count on it.)

Now, if you elect to be taxed as an S corporation, and the reasonable compensation for the work you do is $100,000, you could save yourself a sweet $6535 in tax. It’s even sweeter than contributing to a retirement plan or buying new equipment for your business because you aren’t spending anything to get a deduction. You’re just paying employment tax on less income. That doesn’t sound like much of a puzzle, right?

But consider this . . . if you want to hire your minor kids to shift income to their lower bracket, now they’ll owe FICA they wouldn’t if you were still a sole proprietor. Oh, and now you can’t use that corporation to cover yourself under a medical expense reimbursement plan. But wait, there’s a workaround to that problem. You can just buy a high-deductible health plan and establish a health savings account. Or maybe you could establish another proprietorship, or C corporation, and pay MERP benefits from that business.

Having fun yet? Of course, now your “covered comp” for determining retirement plan contributions will be based on the salary only, not your whole income. If you’re used to maximizing a SEP contribution, you’ll find yourself saving a whole lot less with the S corp.

Aren’t puzzles great? Now, at that point, you could switch from the SEP to a solo or safe harbor 401k, perhaps with a cross-tested profit-sharing contribution. You could even look at a defined benefit pension plan. (Yes, it’s the Studebaker of retirement plans, but sometimes it’s the right answer). But that raises the question whether you belong in a traditional qualified plan at all — or whether you’re better off with a Roth or insurance-based plan.

All of a sudden, that National Puzzle Day that sounded so much fun about seven paragraphs ago is starting to look about as fun as that new Escape Room movie, right? Don’t worry . . . when it comes to organizing your business, or any other tax challenge, we’re here to find the best solution. We really like these puzzles, and nobody does it better!

In 1982, the movie Blade Runner presented a technologically advanced vision of the year 2019. There were flying cop cars. (What grim dystopian movie doesn’t feature flying cars?) There was commercial space travel. There were bioengineered androids, known as “replicants,” that drove the story. The film even predicted voice-controlled video phones to communicate with our offices!

Today’s reality isn’t quite so exciting. We’ve got the voice-activated video phones! But we’re not using them to summon flying cars or book trips to the Moon. No, we’re using them to waste time checking Facebook, Twitter, and Instagram. We pick up our phone every 12 minutes on average, and spend three hours and 35 minutes per day with our heads buried in our screens. Psychiatrists have even identified “internet addiction disorder” as a “condition for further study.”

Well, if you can’t beat ’em, join ’em. The IRS manages several Twitter feeds for taxpayers and professionals that are worth following. But now they’re looking to get even more involved. We’re not talking about auditors posting pictures of their dogs (although we’d totally follow that, too). Instead, they want to investigate whether social media can help them collect taxes.

Current IRS rules generally prohibit employees from using any social media at work. They specifically can’t create fake accounts to “friend” you and snoop on your finances. But the IRS knows that people post enormous amounts of information online, information they can use to help with collections. So last month, the IRS issued a request for information and product demonstrations from electronic research vendors. They’re hoping to find a vendor who can:

  • “Provide a product that is easily explainable in court.”
  • “Provide real time, customizable reports of publicly available social media information (provided or advertised by businesses), such as new products, current sales, and new locations.”
  • “Provide reports showing that a taxpayer participated in an online chat room, blog, or forum, and reports showing the chat room or blog conversation threads.”
  • “Provide available biometric data, such as photos, current address, or changes to marital status.”
  • “Provide access for at least 25,000 concurrent users.”

Show of hands here: who wants any part of the government tracking your profile photos, status alerts, or chat room conversations? The good news is that, at least for now, the IRS would use their new super power for good, not evil. “Such a tool would not be used to search the internet or social media sites for purposes of identifying or initiating new tax audits.” Of course, that doesn’t mean the IRS won’t get more aggressive down the road, using predictive analytics and social media as part of a broader effort to target specific taxpayers for extra attention.

The IRS’s move towards harnessing social media is part of a broader movement to put “Big Data” to work for various goals. But data isn’t always bad. Here at our firm, we’re using it to help clients like you pay less tax. So call us when you’re ready to join the future. Someday your savings might pay for your own flying car!

Movie fans, quick: what do you get when you combine Night of the Living DeadDeliverance, and The Mist — with just a hint of Sophie’s Choice? It probably looks a lot like Netflix’s newest hit, Bird Box. The movie imagines a shattered future where an unknown presence has driven everyone who sees it to suicide and follows Sandra Bullock and two five-year-old children on a desperate blindfolded gauntlet down a raging river in search of safe haven.

Netflix dropped Bird Box on December 21 — a time when they shrewdly calculated most Americans would be fed up with Elf and Christmas cheer, and grateful for the sweet release of post-apocalyptic chaos. Critics generally said “meh.” But that didn’t stop the “disappointingly clunky waste of a star-studded cast” from attracting record views. The show has also spawned memes like the #BirdBoxChallenge, where people who wouldn’t survive five minutes in a real apocalypse bid for internet fame by posting videos of themselves pulling stupid stunts while blindfolded.

Now, we may be biased here, but we assume that at least of few of those millions of viewers wondered what would happen to income taxes after civilization collapses. (We sure did.) And we know you’ll be pleased to discover that our friends at the IRS have planned for that sort of disaster and more!

The first level of IRS emergency preparedness deals with garden-variety disasters like hurricanes and earthquakes. These focus on helping taxpayers manage their obligations until things return to normal. They include predictable tips like taking advantage of paperless recordkeeping for tax files, documenting valuables and equipment, checking fiduciary bonds (to protect yourself if your payroll processor goes bust), and updating emergency plans. They also include policies extending due dates to give taxpayers living in disaster zones time to recover.

But the real action for IRS preppers involves “continuity planning” for existential threats like biological warfare, nuclear winter, or alien invasion. (Aliens from space, not across the border.) Official IRS documents outline several proposals, dating back to the earliest days of the Cold War, to help re-start collections. These include government economists holed up in the usual “undisclosed locations” dispensing cash to restart the economy, deciding when to forget about trying to collect pre-disaster taxes, and probably ditching income taxes altogether in favor of a 20-30% sales tax.

As for our friends at Netflix, word on the street has it that Bird Box producers are readying a sequel called Cat Box, where survivors escape death, not by covering their eyes, but by plugging their noses. (Trust us, you don’t want to take on that monster.) And they’ve created even more buzz now with Bandersnatch, an interactive episode of their Black Mirror series where the bottom border of the screen periodically pops up to let you make choices for the characters and “write your own ending.”

But we can’t see why Bandersnatch is such a big deal, simply because we’ve been doing that for years. Just like television dramas follow a basic structure built around plot, characters, and similar elements, so does a life fueled by money. Lots of people want access to your money pool, and for most Americans, the biggest slice goes to the government. But no one else is using the Tax Blueprint® to script your financial life, with lower taxes as your central character. That’s why you need to call Financial Gravity now, to avoid tax apocalypse with your eyes wide open!

These days it seems like every day brings new controversy to further divide Americans: red states squaring off against blue states and partisanship crossing the line into tribalism. And that’s just as true with the holidays as with anything else. Is fruitcake really an abomination? Is Die Hard really a Christmas movie? Is Baby It’s Cold Outside really a musical #MeToo violation in two-part harmony?

Fortunately, there are still some headlines that can bring us all back together. So this holiday season, we’re especially delighted to remind you that A Visit From Saint Nick is a tax-free celebration. Santa won’t be leaving a 1099 under your Christmas tree, and there won’t be any Form 1040-GIFT to file after the tree comes down.

Taxable income generally includes all income, from whatever sources received. However, the tax code carves out several exceptions to that rule, much like Grandpa carves the drumsticks out of the holiday turkey. A “gift” is something of value, given without expecting anything in return. IRS Publication 525 states that “in most cases, property you receive as a gift, bequest, or inheritance isn’t included in your income.”

“But what about the milk and cookies?” you might ask. “That’s the deal, right? Santa shows up with a bag of presents in exchange for cookies and milk (or maybe bourbon and eggnog). Doesn’t that transform the whole occasion into a taxable exchange for value?” To which we might respond, “How did you get to be such a Grinch, anyway?”

“Ok, then, what about the gift tax?” you might challenge us next. Well, for starters, that’s a levy on your right to give, not receive. So there’s never any tax due to the recipient. You can give up to $15,000 each to as many people in a year as you like. If you’re married, you and your spouse can join together to give up to $30,000 to every lucky winner. If you give more than $15,000 to a single recipient in a single year, you’ll have to report the excess on Form 709. But even then, you won’t owe actual tax until your lifetime taxable gifts exceed $11.18 million.

With those rules in mind, Santa’s gotta be awfully generous before Christmas morning turns into a taxable event, even for him. (Granted, a trip to Tiffany’s might do the trick.) But there’s one last scenario to address — and one last loophole to highlight — before we finish our discussion. That’s the Christmas Morning Car, an advertising staple since Lexus launched their “December to Remember” campaign back in 1998. What happens when Santa leaves a shiny new car wrapped in a big red bow in the driveway?

This is the part where we’re going to have to shatter some precious childhood illusions. Sorry, boys and girls, but that’s not really Santa leaving that Lexus in the driveway. It’s just Mom buying the car for Dad, or Dad buying it for Mom. And transfers between spouses are tax-free up to any amount. Which means, once again, that the IRS won’t be taking a bite out of your Christmas cheer.

Like everyone else, we wish you the best this holiday time, whether you celebrate Christmas, Hannukah, Kwanzaa, or even Festivus. But we want to offer something a little more tangible. Help us give you the gift of proactive planning. Call us when you’re ready to save, and together we’ll make the season even brighter!

If you pay attention to financial news, you can’t escape hearing about Bitcoin and other cryptocurrencies. Bitcoin is just like country music, Justin Bieber, and pineapple on pizza — people either love it, or hate it, but there’s no middle ground. The billionaire Warren Buffet dismisses it as a “mirage,” a “Buck Rogers” phenomenon, and “rat poison squared.” But legions of fans see it someday replacing government-backed currencies. Odds are good that one of the millennials at your holiday table believes in Bitcoin as hopefully as they used to believe in Santa Claus.

Just as Pinocchio always wanted to be a real boy, Bitcoin wants to be real money. That means accomplishing two goals. First, it has to serve as a store of value. You have to be confident that if you put something in, you’ll be able to get the same value out. And second, it has to serve as a medium of exchange. That means you have to be able to use it to pay for things just like you would use cash.

So far, Bitcoin’s record in both areas is spotty. If you were one of the unfortunates who jumped into the market a year ago at $17,900, you’re probably not feeling the love now that it’s collapsed to $4,000. Similarly, if you’ve tried to use it to pay for gas or groceries, you’ve probably gotten blank stares from the cashier.

And so, at least until now, Bitcoin and its blockchain-based peers like Ethereum have made news mainly for their wild price fluctuations. But last month, Ohio Treasurer Josh Mandel announced the Buckeye State would become the first to accept Bitcoin for tax payments. For now, the program is limited to business filers, although they can use Bitcoin to pay for any type of tax. However, the state plans to expand the program to individuals down the road. (We’re not sure if that will happen before or after Ohio finally gets a decent professional football team.)

Treasurer Mandel, who at age 41 is young enough to consider himself an honorary millennial, is a longtime fan of the currency. But last month’s move is part of a broader effort to attract software engineers and tech startups to the state. “We’re doing this to plant the flag in Ohio as a national and international leader in blockchain technology,” said Mandel.

Ohio has set up a website (of course) at OhioCrypto.com to accept payments. They’ve engaged a company called Bitpay to process the transactions and convert the coins into cash. The fee for that service is just 1%, which is cheaper than using a credit card.

Will virtual currencies someday break through into the mainstream? At this point, who knows? (We’re still waiting for the flying cars we saw on The Jetsons — although Rosie the robot housekeeper is almost here, and you can buy a watch to make video calls with Mr. Spacely for $279). And while Bitcoin itself is grabbing most of the cryptocurrency headlines, it may not be the ultimate winner. (Google wasn’t the first online search engine, either.) If recent trends are any guide, Bitcoin will remain a punchline until suddenly, one day, it’s not.

Here’s the real bottom line of last month’s news. The world is changing — and, like it or not, we have to change with it. That’s true for tax professionals, too. The Flintstones may have been perfectly happy with someone telling them how much they owe. But the Jetsons want to know how to pay less. That’s where we come in — and we’re looking forward to helping you through 2019 and beyond!

Take a look at our Internal Revenue Code. No, really, take a good look. (You can buy it on Amazon for just $161.89: two thick paperbacks totaling 4,968 pages. You even get free Prime shipping!) At first glance, it’s all about the revenue. For FY 2019, federal income taxes should hit nearly $1.7 trillion. Payroll taxes will top $1.2 trillion. Corporate taxes, $225 billion. And estate taxes will generate somewhere around $20 billion, depending on how many billionaires die (#dropinthebucket).

But taxes aren’t just about the revenue. Washington loves to use taxes to accomplish goals they can’t legislate directly. This generally takes the form of “tax expenditures” — special deductions, credits, or other rules designed to benefit specific favored activities or taxpayers.

The mortgage interest deduction may be the most famous of these carrots. For most people, homeownership is a cornerstone of the American Dream. But Congress would be hard-pressed to pass legislation requiring it or even directly rewarding it. (Buy a home! Get a free $5,000 Target gift card!) So instead, they use taxes to subsidize it. For 2018, homeowners saved $68.1 billion by deducting mortgage interest on their taxes.

But every so often, the government uses taxes as a stick . . . or at least they try to. Last week, the Wall Street Journal published an editorial blowing the whistle on one such effort that may violate the First Amendment. Specifically, it accuses the IRS of punishing nonprofit organizations that advocate for legal marijuana:

“The innocuously named Revenue Procedure 2018-5 contains a well-hidden provision enabling the Service to withhold tax-exempt status from organizations seeking to improve ‘business conditions . . . relating to an activity involving controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act) which are prohibited by federal law.’ That means that to obtain tax-exempt status under any provision of the Internal Revenue Code’s Section 501 — whether as a charity, social-welfare advocacy group or other types of nonprofit — an organization may not advocate for altering the legal regime applicable to any Schedule I or II substance.”

Bottom line, according to the authors: “The IRS seeks to control independent policy advocacy. That’s something the federal government may not do.” If they can’t prohibit the speech directly, they can’t use the tax system to do it indirectly.

Yes, “the devil’s lettuce” is still prohibited under federal law. But 33 states have passed laws legalizing it in some form or another. It says a lot that the buttoned-down stiffs at the Wall Street Journal could publish the same editorial as the stoners at High Times magazine. So why would the IRS choose to wield this particular stick? And is it really the IRS’s job to make those sorts of decisions anyway? Isn’t the IRS just supposed to be the government’s bill collector?

As far as we’re concerned, we don’t care what motivates you more, carrots or sticks. We just want to make sure you get all the breaks the law allows. But we can’t do it if you don’t ask us. So pick up the phone before time runs out to save in 2018, and lets see how we can put the rules to work for you!

Wall Streeters have a lot to give thanks for this holiday season. Earnings are up, so bonuses are up. And that, in turn, means taxes are up, too. The New York Post just reported that Wall Street Bankers Are Throwing Excessive Parties To Dodge Taxes. But will the wining and dining actually put money back in their pockets? Or is the tax angle just a convenient excuse to party up a storm on the company tab?

Wall Street culture rewards bankers for results. They generally start out with low fixed salaries, at least as a percentage of their overall pay. Then, around this time of year, the bosses get together to count their profits, and shower producers with whatever bonuses it takes to keep them from jumping ship to the competition. In 2017, Wall Street pay jumped 13% to average $422,500 per head. And one consultant predicts sales and trading pros could see 20% more this year in their stockings.

Here’s the problem for all those Masters of the Universe glamming it up in their Manhattan condos. Last year’s tax bill cut the top federal rate from 39.6% to 37%. However, it also capped deductions for state and local taxes to a flat $10,000. That’s a real punch in the gut for Manhattanites paying 13% to the state and city. Throw in 3.8% more for Medicare, and that brings the total skim up to 54%. That’s not as bad as the “one for you, nineteen for me” the Beatles sang about in Taxman. But it’s hard to get rich if tax collectors are taking home more than you do!

And so, concludes the Post, “Bankers and traders will be celebrating the prospect of massive, multimillion-dollar payouts — and they’ll use the mega-expenses of year-end blowouts as write-offs for their inflated tax bills, according to industry sources.”

It turns out, though, writing off a pricey dinner isn’t a very tasty tax shelter. Let’s say you treat yourself and three colleagues to the $795/person “white truffle” extravaganza at Daniel, an Upper East Side mainstay. (Relax, your wine pairings are already included in that price!) $3,200 sounds like a lot to shell out for dinner. But after you deduct 50% and multiply it by the 54% tax you save, Uncle Sam covers $864 of that bill.

Now, $864 might cover the sales tax and tip. But in the end, it’s a subsidy, not a savings. Nobody puts money in their pocket by splurging on Florida frog leg mousseline with porcini mushrooms in a white truffle white wine sauce. It’s delicious if you’re into that sort of thing, and it looks great in your Instagram feed. But you can’t retire on it (unless you’re the celebrity chef selling it.) You’d think seven-figure financial wizards would be smart enough to figure that out! (Or maybe they’re making so much it doesn’t really matter?)

While bankers are out celebrating, they should raise a toast to a different blessing. The law that capped deductions for state and local taxes also eliminated them altogether for business entertainment. But Washington did such a clumsy job writing it that tax pros across the country worried it might have killed writeoffs for meals, too. Last month, the IRS clarified that meals are still deductible, so long as they’re not “lavish or extravagant.” So you tell us — does $795 for five courses of white truffles pass the test?

Nobody likes paying more tax than they have to, especially when they’re paying 54%. But we understand the best tax plans are the ones that help you accomplish financial goals beyond a night out on the town. So call us when you’re ready to save, and we’ll give you something to celebrate!