Jake Greenberg

Jake Greenberg is a CERTIFIED FINANCIAL PLANNER™ professional specializing in comprehensive financial planning. He is committed to helping his clients develop sound financial strategies in order to get them to and through retirement using the most tax-efficient and cost-efficient methods possible. Prior to joining Pure Financial, Jake was a lead strategist in charge of running [...]


Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Alan Clopine

Alan Clopine is the Executive Chairman of Pure Financial Advisors, LLC (Pure). He has been an executive leader of the Company for over a decade, including CFO, CEO, and Chairman. Alan joined the firm in 2008, about one year after it was established. In his tenure at Pure, the firm has grown from approximately $50 [...]

Stimulus checks, CRD’s, and changes in RMD’s – if there is ever a year that you could make mistakes on your taxes, this is it. Last tax year, 747 billion dollars worth of tax deductions were claimed, but many more were missed. Financial professionals Joe Anderson and Alan Clopine want to help you avoid costly tax filing mistakes. Special guest Jake Greenberg from Pure Financial also arms you with information about how to avoid the most common mistakes.

Important Points:

(01:12) – Tax Deductions

(01:45) – Avoid Costly Tax-Filing Mistakes

  • Don’t Miss Deadlines
  • Filing Factors: 2020 Changes
  • Common Mistakes
  • Tax-Filing Tips

(02:50) – Filing Deadlines

(03:58) – Last Filing Penalties

(05:32) – Stimulus Check

(07:51) – The CARES Act

(10:40) – The SECURE Act

(12:22) – Common Tax Filing Mistakes

(19:37) – IRA & Roth IRA Contributions

(20:46) – Last-Minute Strategies

(22:35) – Ask the Experts

(25:17) – Pure Takeaway: Avoid Costly Tax Filing Mistakes

  • Meet the Tax Deadlines
  • Be aware of 2020 Tax Changes
  • Avoid Common Filing Mistakes
  • Consider Last Minute Strategies

Make sure to subscribe to our channel for more helpful tips and the latest episodes of “Your Money, Your Wealth.”


Joe: Can you believe it’s tax time already? 2020 was a crazy year, as we all know, but how is that going to affect your overall taxes? We had the CARES Act. Are you familiar with the secure act? Stick around and figure out not to make the mistakes that most people do. Each and every year when they file their taxes. Welcome everyone shows called Your Money, Your Wealth, Joe Anderson here, president of Pure Financial Advisors And of course, the show would not be a show without the big man. Big Al Clopine. He’s sitting right over there.

Al: Hey, Joe, how are you doing today? Tax filing? Tax time. Love it, right?

Joe: Is that your new thing? That the new thing? Big Al with the shooter McGavin here. You know, when you take a look at taxes, especially when people are filing, a lot of changes have happened over the last couple of years and we don’t want you to make the same mistakes that most people have. But you also want to make sure that you are aware of what is different this year, that city’s financial focus. Don’t pay more tax than we absolutely need to pay your fair share, but you can do things to reduce your tax liability, that’s us. That’s the United States. That’s our given right. $747 billion that we were able to take advantage of deductions, I would imagine that there’s another several hundred million dollars of missed opportunities. It’s a huge issue. So let’s put money into your pocket instead of Uncle Sam’s. And who’s better to help us out than Big Al Clopine?

Al: So it is tax time, and Joe, I live for this time. So you hate this time, Alan. This is why you got a lot of tax preparation. I love it now because I’m not preparing taxes anymore. But let’s talk about how to do better with your filing. So right off the bat. Let’s talk about not filing late. Make sure you file on time. Don’t miss the deadlines, OK, because the penalties are pretty big. We’ll go over that in a second. We’re going to talk about changes for 2020. We’re going to talk about common mistakes, common tax filing mistakes, and then we’ll want to get in to some final tax filing tips.
There’s just a few more things that you can do between now and your tax return due date. So, Joe, this is it’s tax season. People need to start thinking about taxes. February 12th was the day the IRS started accepting returns. So it’s time for people to get serious. Yes, some people are already tight and like January 3rd, some I don’t know too many like that.

Joe: I’m more of an October guy. I’m October 10. Got it right. Speaking of the deadlines, right, I think everyone knows Tax Day is April 15th. You know, Alan, your birthday is right around there, so that’s why you became an accountant. And then partnerships and escorts is a little bit different. It’s March, so March 15th for those. And then the C Corporation, of course, is April 15. That’s the standard of filing Tax Day, but there’s also extensions that we all can use now. There’s misconceptions. I think people, if I extend my return out there, I might be more subject to audit. Have you ever heard that before?
Al: Yes, we have, and we’ve heard the opposite, which is if you extend, they get to their quota of audits and they won’t get to you. The IRS says it’s it’s baloney that they don’t trust that, but you can you can extend and it’s a six month extension. It’s now automatic. So for individual and corporation, you can extend till October 15th. For S-Corp partnership, it would be September 15th. And so realize when you do an extension if you extend the time to file the return, but you still have to pay the the taxes due by the due date.

Joe: Well, there’s there’s penalties, right? I think people get confused is I, you know, I have this big tax bill, so I’m not going to file. I’m just going to pretend that right. I’m just going to sneak into the abyss until I have enough cash right to pay the tax bill. But you absolutely don’t want to do that. You still want to file, even though let’s see if you have a larger tax bill that you don’t have the cash to pay the tax, you still absolutely want to file. Well, that’s true, Joe, because there’s a late filing penalty. So for an individual and a C corporation, it’s five percent of the outstanding balance per month per month, so it maxes out at 25%. Now for an S Corporation or Partnership LLC, it’s about $205 per partner. So if you file a couple of months late and you have 10 partners, it’s about a $4,000 penalty. There’s no reason to pay these penalties, so make sure you file timely even if you don’t have the cash to pay it. If I don’t have the cash to pay and I still file once my penalty for not paying well, there is that penalty too. There’s late payment penalty, which is another half a percent per month, and there’s the interest rate, which is 3% per month, so it works out to about 9% per year for not paying in time.

Joe: So either way, the IRS is going to get there. There’s all kinds of penalties. So file your return. Make sure that you have enough cash that you know the pay, the taxes. You know, another thing too, is let’s say people are waiting for refunds versus owning at the end of the year. And if they get refunds, they’re like, This is great, right? Or if they don’t owe anything, they’re like, I don’t I don’t pay any tax. Well, no, it’s coming out of your paycheck.

Al: Yeah, that’s right. You already paid, whether you know it or not. So, Joe, let’s talk about what changed in 2020. So right off the bat that the The CARES Act that was signed in March and the first thing that most people realize is there’s a stimulus check for many of us. So the first one was $1,200 per individual, $2,400 per couple $500 per child. There were phase outs based upon your income level, so not everyone got it. That was based upon 2018 or 2019 adjusted gross income, whichever one was filed. But interestingly enough, it’s actually a credit on your 2020 return.

Joe: Right. So people can still receive this credit, which so if you received the chapter’s no taxes, do it’s not like, do I put this on my tax return? Do I have to pay taxes on it? It is a tax credit that they just advanced you, right? So they gave you the $1,200 or $2,400 or how many kids that you had, right? Whatever dollar figure that you received. No, that’s not taxable income. It’s that dividend income. It’s a tax credit that they fronted us. For those of you that did not receive that stimulus check, you still might be able to receive that tax credit as long as your 2020 return is under these threshold. 75. Single $150,000, 150,000 Married. So if you fall underneath these thresholds, you will get these credits. So it’s very interesting that, no, this is not income, this is a tax credit.
And for those that didn’t qualify before, may qualify. Still, just because, let’s say if your income was down prior to the previous two years, yeah, and a couple more things on that. So there was a second stimulus. This was in December. So this was $600 per individual. $1,200 per couple. Same rules, essentially. So it will also then be true that, if you will, on your 2020 return. So there’s a new line on the return. It’s the Recovery Rebate Credit. It’s on Line 30. So that’s what you have to deal with to be able to to to show that you got the credit or you didn’t get enough credit. There is a worksheet in the instructions. It’s 21 lines. It’s a little complicated, but you have to work through it. I think for many of you, probably use tax software, it’s going to be a lot simpler than trying to work through the instructions. Yeah, absolutely.

Joe: You know, pencil, you are right at 10:40 out. Two other things real quick is that the required minimum distributions were waived. So if you took your RMD, you didn’t necessarily have to, you’ll still have to pay the tax. But if you don’t see your RMD, you’re like, Oh my gosh, I didn’t take that required distribution. Am I going to get penalized? No. It was way. And then the CRT is a coronavirus related distribution. The IRS gave us all this CARES Act gave the ability to pull money from a retirement account and not necessarily pay any penalties if you’re under 59 and a half and also had some unique features in it where you could pay it back over three years or pay the tax over three years. So if you did do a CRT this year, there could be some interesting tax complications on your return, which will get to you when we come back from this quick break. Hey, go to our website, Your Money, Your Wealth. Click on that special offer. It’s our 2021 Tax Planning Guide 2021, right? So we can look forward, but also make sure that you don’t screw up your 2020. Return yourmoneyyourwealth.com. Click on that special offer. We’ll be back in just a second. You’re watching Your Money. Your Wealth.

Joe: Hey, welcome back to the show, show’s called Your Money Your Wealth. Joe Anderson and Alan Clopine hanging out here talking about tax filing. All right, get your shoe box out, right? Start collecting your documents because you got to file your taxes. Stick around. We’ve got Jake Greenberg joining us. He’s a CERTIFIED FINANCIAL PLANNER™, Managing Director at Pure Financial Advisors. We’re going to talk about common mistakes that people make when filing their taxes. But before we get there, let’s go to the true false question.

Al: If I pay back my coronavirus related distribution by 2022, I can avoid paying any income taxes. Joe. True or false?

Joe: I have no idea. I don’t know. What if someone took a CRD and they paid it back? Is that the question? They don’t have to pay any taxes. Well, yeah, they pay it back. They don’t have to pay any taxes. But the. But when did they pay it back? Yeah. Well, they didn’t say so.

Al: So it’s true, but there’s a caveat. Got it. So it’s true if you if you pay your coronavirus distribution back by 2022, you don’t pay any taxes. However, you need to pay taxes one third in 2020, one third in 2021, and in 2022. No taxes. Then you file amended return to get those other taxes back. So it’s a little sloppy, but that is a true statement.

Joe: So if I paid an extra $5,00 in tax because of the CRD in 2020, 2021 and then I pay everything back in 2022, then I get that $10,000 refund you do without interest, of course, without interest. Got it. OK, very good. Hey. Two other quick things before we get Jake Greenberg in here we have. The Secure Act was signed just a few years ago, and there had some significant changes in regards to retirement accounts was probably the biggest one the elimination of the stretch IRA. But the other two that were pretty cool is that they extended their required minimum distributions from age 70 and a half to age 72. And then now there’s no age limit. Big Al so you can continue to contribute to your IRA as as long as they work, as long as you want, as long as the earnings work.

Al: Yes. Yeah, you got it. Yeah, right? So one more thing on the stretch IRA. So this is where when you inherit an IRA and you’re not the spouse, so not spousal IRA, you used to be able to stretch that IRA over your whole lifetime. In other words, you could take a little chunk out over your lifetime. They got rid of that with the secure act. But there’s a couple exceptions and the exceptions first one I already mentioned. So it doesn’t apply to spouses, but if you’re disabled or chronically ill, it doesn’t apply. If you’re a minor child, it doesn’t apply until you reach the age of 18, then you got to go to the 10 year payout. And then if your beneficiary is within 10 years of the age of the IRA owner, then they can use the old rules. So just be aware of that

Joe: Fairly complicated. A lot of different changes, a lot of different rules in. There’s probably a lot more to come. Let’s bring Jake Greenberg in to talk about mistakes. Mistakes that people make mistakes. Is, Is that even a word? I don’t know? Don’t there’s a lot of mistakes that I guess that’s what people get. So you get flustered when you talk about taxes because you don’t want to pay them. So let’s not pay more than we need. Jake Greenberg, Welcome to the show, my friend.

Al: Thanks, Joe, and welcome, Jake. Thanks so much for being here.

Jake: And of course, nice to be here again.

Al: Let’s talk taxes so mistakes people make. I think one of the things people do, they get so anxious to fail to get the refund. They fail before all their forms, before they receive all their forms. You know, it’s not necessarily a good idea.

Jake: Yeah, no. Especially because those that are wanting to file quickly, they could be missing a 1099. They haven’t come in yet. Sometimes when you do get a 1099, especially for like a brokerage account, for example, sometimes they’ll ask you amended 1099 later. And if you’re too quick to file and those documents come later and you’re just creating more work for yourself because you’re going to likely end up needing to file an amended return.

Al: Yeah, exactly. And those those corrected 1099 generally come in all the way through March, mid-March or sometimes later. Yeah, they can. So here’s another one. People tend to put the income on the wrong lines, and that’s not very good either, because of the IRS is matching.

Jake: Yeah. So I see a lot, especially people, that do their taxes themselves. It’s not the most straightforward thing to do. I mean, a lot of times you’re maybe getting income that you haven’t received before, especially if you’ve retired and now you’ve got, you know, income coming in from IRA accounts or pensions. And it can get real confusing what line to put that on. Sometimes it’s taxable, sometimes it’s not taxable. So depending on where you’re putting that income, you could either end up paying too much tax or maybe not getting credits back that you should or the right deductions and again, ultimately having to make you file an amended return. And the IRS does not have a habit of letting you know if you paid too much and you filed your taxes wrong and they’re not going to let you know that you should have gotten a refund in most cases. So all over you, if you paid too little, they’re going to let you know if you paid too much. It’s probably going to say much

Al: So, here’s another one. So you’re an independent contractor. You got a few 1099 names, but not all of your income was received on 1099, and the tendency is to only report income on 1099. And that’s not necessarily correct either.

Jake Yeah, no technically you’re supposed to report all of the income that you have, so if you’ve got a 1099 for it or not, you still need to report it. And for a lot of business owners, if they’re dealing with vendors that maybe aren’t big, companies just may be sole proprietors. It’s a good chance that they’re probably not going to send you a 1099 at the end of the year, but you still need to be tracking all of the income and expenses and all of those other things that, of course, you need to be reporting on your return.

Al: Yeah. And of course, the IRS, if they audit you and check and they find unreported income, they sometimes refer that over to the Criminal Department. So you don’t really want to go down that path. Yes. OK, how about this when the standard deduction a couple of years ago was was basically doubled, it’s a lot higher. So a lot of people just do the standard deduction. But many, in some cases they’re missing out on deductions by not taking a look.

Jake: Yeah. So when the standard deduction was doubled, a lot of people, especially if you don’t own a house and you’re not paying mortgage interest. Some people just kind of assume that, yeah, I probably can’t itemize because my not my other deductions aren’t enough to exceed it. However, depending on the year, let’s say that you had, you know, higher medical expenses, or maybe you give it to charity or whatever the case may be. You still want to fill it out just in case it does go over, even if it’s just a little bit over, you still want to itemize instead of taking the standard, because of course, that’s going to save you some money.

Al: Yeah, and certain states like California, for example, where we’re at, they did not increase the standard deduction. So you’re missing out there as well. So what about IRAs? You know, when you do an IRA contribution, in some cases, people miss those contributions, and that’s not the best strategy either.

Jake: Yeah. So with an IRA, you do have until April 15th to make a contribution. So a lot of times when you are preparing your tax return, you should be in the habit of even if it’s a Roth, including that income. Right? Excuse me, including the contribution on the return, because those contributions are based on your income. So if you’re filing by hand, of course, the software isn’t going to tell you if you could or not. But if you’re using some of the more common tax softwares out there, it’s going to tell you how you were allowed to make that contribution or you weren’t. So also with an IRA account, depending on your income, if you did make a contribution, it’s possible that you may get a deduction for it or maybe not. So reporting that correctly is going to be important. Yeah.

Al: And speaking of tax software for people that file their returns by hand math errors, this is one of the most common things. And so I tell people, don’t do it. There’s good tax software out there. There’s good professionals and it just goes a lot better. The method is the most common mistake for people that file by hand.

Jake: Yeah, believe it or not, I actually still have a few clients that that do that. And another way that some of my clients will do it is they’re not even using tax software, they’re just downloading the PDF and then typing everything in. But you just in many cases, don’t know what you don’t know, and sometimes you could be again causing yourself mistakes that is going to cause you trouble later.

Al: Well, thank you so much, Jake. That was great information. ‘

Joe: Great stuff, guys. Hey, go to our website, yourmoneyyourwealth.com. Click on that tax planning guide for 2021. Don’t make the mistakes that we just talked about. Learn more. Go to yourmoneyyourwealth.com. Click on our special offer this week. It’s our tax planning guide. We’ve got to take a break. We’ll be right back.

Joe: Hey, welcome back to the show, shows called Your Money Your Wealth. Joe Anderson, Alan Clopine. We’re talking about tax filing tips. It is tax time already. Can you believe it? Before we finished the show, go to yourmoneyyourwealth.com. Click on that special offer. We got the 2021 Tax Planning Guide to help you out there. 2021 tax planning guide. Go to yourmoneyyourwealth.com. Click on that special offer. Let’s see how you did on the true false question.

Al: I inherited a non spousal IRA prior to December 31st of 2019. They can still use the old stretch IRA provisions for the rest of my life. True or false?

Joe: True, true, very true. Yeah, we talked about the secure act that changed all of that. So if you did inherit a retirement account, you can still stretch the tax out over your life expectancy. Some questions come about now that the rule changed. Now do I have to comply with the ten year? No. You can continue to drain the overall account out as quickly as you want, but you can at least stretch it out over your lifetime. So that’s the good thing. Yeah. And I think the interesting thing is a lot of IRAs that are inherited are small. And so we find that a lot of people just go ahead and distribute anyway. So it doesn’t really matter. But for those IRAs that’s larger, if you got it before December 31st in 2019, you still can stretch it over your lifetime. So why don’t we talk about a few things you can still do for 2020? So one right here is you can still do an IRA contribution. Regular IRA contribution Roth IRA contribution by April 15th of 2021 for your 2020 tax return. You can $6,000 or $7,000 extra thousand dollars if you’re over 50. And if you want to do the Roth, there are some income limitations where if you’re single, once you hit 124,000, it starts phasing out if you’re married. Once you hit 196,000, it starts phasing out. And if you’re over those upper limits, then you can no longer do a Roth IRA. So just be aware of that. And so I think there’s a few more things people can do.

Joe: Yeah, I would say about 95% of all the tax planning needs to be done in the calendar year, so your focus really should be on 2021 because there is a ton of things that you should be looking at each and every month to make sure that you reduce the taxes because it always never fails.
It’s April, you’re doing your taxes and you’re like, Oh my gosh, look at how much money going to the IRS, so you should have done some tax planning. Well, it’s too late, but here’s some really good things that you can do that will save you maybe $5.

Al: Better than nothing right now. So let’s start with that. Get organized, right? Take out that shoe box. Look at those receipts. Go through your checkbook. Go through your online statements. Whatever you have, go through your credit card bills. You probably find some stuff that may be deductible, right? So that can still help you for 2020, because a lot of times people wait till April 15th, they don’t have time to look through the records and they end up missing deductions. Another one is if you’re self-employed, you can still a fund a SEP IRA simplified employee pension plan that’s typically 25% of your bottom line profit on your on your business. So that can be done by April 15th or even October 15th if you extend your tax return. $300 charitable deduction So that’s a new above the line. So even if you do a standard deduction, you can now can deduct $300 in addition to this standard deduction. You can save $5 on your return giant. That’s a giant one. Another would be you can fund your HSA account health savings account. So that’s if you have a Health Savings Qualified Insurance Plan health insurance plan. And then finally, there’s lots of credits. Don’t make sure you don’t forget them like a common one is child care credit or just child credits, solar credits, electric car credits. There’s all kinds of stuff. Make sure you’re taking advantage of all these because these put more tax in more dollars in your pocket.

Joe: Yeah. Well, I guess the big thing is get organized, right? Yeah. Let’s start taking on the good stuff to see that you don’t miss anything and then just rewatch the show over and over and over again, and then you’ll never watch it again. Let’s go to ask the experts.

Al: This is from Walter Rancho Santa Fe. I’ve heard that the estate tax exemption may be reduced in the near future. Are there any strategies to reduce future estate taxes that my kids would have to pay when I’m gone? Walter, there’s yeah, there’s a bunch of things you can do. I probably the easiest thing is right now that’s $11.5 million exemption per person if you pass away. So that means if your total assets, including your home, are less than $11.5 million, they go to the next generation tax free. But if they’re above that, then there is a state tax of 40 percent of anything above that. There’s talk right now of reducing that 11.5 million to 5.5 million or even 3.5 million. So one of the strategies people are thinking about right now is if you’re over those amounts gifting to the kids or your beneficiaries early while you’re still living. While we still have that $11.5 million exemption, you use it up. Right. But but you can use it while you’re living. That’s called gift tax. If the IRS reduces the exemption, they’re not going to claw back that other gift. And Joe, of course, there’s lots and lots of other estate planning strategies.

Joe: Walter, did you get all that you that I got to get it all to be asking after I watched that a couple of times to pick it up? Let’s go to Sandy.

Al: OK, Sandy, from Oceanside, what is the deadline for giving to my children the maximum gift allowed for 2020? Is that the same as the tax filing deadline? What do you think?

Joe: So if I understand the question Sandy, you are trying to give to your children and you want to give the annual exclusion amount of, let’s call it, what is it? $13,000. $15,000? Yep. All right. So she’s giving $15,000 to her children each year, and so she’s looking at, can I give can I wait until the tax finally deadline to give that gift? Or do I have to file it now? Or maybe it’s a larger gift. The gifts need to be done in the calendar year, Sandy. So if you do a gift this year and you want to count it for your annual exclusion of last year, sorry, it’s too late. So like I said before, most of the tax planning strategies, if you’re looking at gift the estate planning, just saving money on ordinary income tax, the capital gains tax to all the other taxes in between. You want to make sure that you get it done in the calendar year. That’s why we come up with the tax planning guide. Go to our website, yourmoneyyourwealth.com and click on that tax planning guide. It’s our gift to you or Your Money Your Wealth viewer. All right. So what the heck did we learn today? Well, first of all, you’ve got to look at the deadlines, make sure that you meet the deadlines. File your taxes on time. Be aware of the 2020 changes. There are some nuances that you want to make sure that you’re aware of. Avoid the common mistakes that most people make just simple mistakes. You know, that’s an extra couple of bucks out of your pocket. And then also look at last minute strategies. There’s always potentially something that you might want to look at. We’re Big Al Clopine and I’m Joe Anderson. That’s another episode of Your Money Your Wealth.