Merritt Webb Welcomes New Attorney Andrew G. Foster

Merritt Webb would like to welcome a new attorney to our Durham office.  Attorney Andrew G. Foster has joined the Merritt Webb team as our in-house tax attorney.

Andrew is from Fayetteville, North Carolina and attended the University of North Carolina at Chapel Hill, majoring in Business Administration. After taking a few years after college to work, Andrew attended N.C. Central University School of Law where he graduated first in his class. In 2011, he graduated from the University of Florida’s LLM program in Tax. 

Andrew has been working in the tax field for 2 years and when he’s not being a tax attorney he likes to play golf, play with his 15 month old white Lab, and go to the lake with his wife, whom he met in college. The last book he read was A Game of Thrones by George R.R. Martin.

Welcome to Merritt Webb, Andrew!

How to Conduct Yourself During a Traffic Stop

Traffic stops commonly occur for many reasons, like speeding, swerving, or a busted tail light. Police officers can be confronted at these stops with anything from a smile to a display of physical agitation. Because of this, officers undertake extensive training on traffic stops on a variety of topics like safe places to conduct a stop to interpreting basic human behavior. This is done because traffic stops aren’t just the bread and butter of police work; it’s also the most dangerous police work an officer can undertake. For example, in California a two-man unit activated their lights for a traffic stop of an SUV. The driver then slammed on their brakes and jumped out of the vehicle, firing through the patrol car's windshield with a laser-sighted gun, seriously wounding both officers.

• Act calm and don’t do or say anything that can be interpreted as threatening, even as a joke.
• Do not get out of the car unless the officer tells you to do so.
• Keep your hands in plain sight, like on the steering wheel.
• Do not reach for anything without letting the officer know you’re reaching for it and what it is.
• Do not argue with the officer. Although you may feel you’re right and the officer is in the wrong, it will make no difference; you’ll have your chance to argue in court. 

Officers are trained to observe and interpret motions and movements that you and I would consider innocent during a traffic stop. Sometimes these motions are seen as potentially threatening, which has the potential of escalating an innocent traffic stop into something much more dangerous. Here are some tips on how to behave during a traffic stop; it’ll make you and the officer more comfortable:

Remember to stay safe out there!

Thanks to Police Magazine.

The Cost of Winning

It’s been said death and taxes are the only things to be sure about in life. It’s easy to reason that Gabrielle Douglas wasn’t thinking of either of those things on the Olympic podium earlier this month, especially at the age of 16. But like any other American teen with a part time job (well, career) she has to pay taxes on her earnings. And how! According to yahoo.finance.com, a gold medal with a cash prize of $25,000 is taxed at 35%. This means the taxes on each gold medal is $9,000. According to Yahoo, Gabby, with her 2 gold medals, owes Uncle Sam around $18,000, while Michael Phelps, who over the course of his career has won 18 gold medals, has paid $162,000 to Uncle Sam in the past 8 years. Yahoo’s report on this matter has created uproar against taxation across the nation, with Florida Senator Marco Rubio proposing an amendment to the tax code to make Olympians, and their winnings, tax exempt.

The issue with Yahoo’s reporting is that they report the tax rate for a gold medal at 35%, which would mean that the individual being taxed would have to earn over $388,500 a year. Certainly, with the endorsement deals that follow an Olympic victory, Gabby and Michael will likely qualify for that tax bracket. But what about the winners who won’t cash in on that kind of fame?

Prize winnings, Olympics or otherwise, have to be reported on tax returns and sometimes the taxes end up costing you more than the winnings. But it’s not just cash prizes that qualify either; you’ve got to pay the taxes on the fair market value of any property you win.

Ever hear of the HGTV Dream Home giveaway? Every year, Home and Garden Television networks has a drawing where one lucky winner wins a mansion, a cash prize of over $100,000, and a new hybrid car. The sweepstakes is entered by thousands every year and can be a life changer for the winner.

What many don’t realize is that a lot of winners can’t afford to pay the taxes on their prize. Take, for example, Don and Shelley Cruz who won the 2005 HGTV Dream Home giveaway. The home they won was located in Tyler, Texas and came with 6,000 square foot lake front mansion, a guest house located on the lake, a brand new hybrid SUV, and a cash prize of $250,000. The cash value of the prize was nearly $2 million dollars. Mr. Cruz was a stay at home dad while his wife, Shelly, was an administrative assistant who had gone back to school to become an accountant. Within 2 years, the home they won and the prizes had to be sold at auction, by that time the Cruz’ were reportedly nearly bankrupt.

In an interview given with about.com columnist, Sandra Grauschopf, Don Cruz admits that, even though he and his family auctioned off the million dollar dream home, he still enters the sweepstakes every year hoping to win again. He called the experience life changing, and for many winners, Olympians included, winning a prize of such caliber can be life changing indeed.

Highway Use Tax Due

For those of you who thought taxes were done and over with April 17, think again. On August 31, the Highway Use Tax is due for truckers and owners of heavy vehicles that frequent Americas’ highways. The deadline applies to motor vehicles that weigh 55,000 pounds or more. This includes trucks, tractor trailers, buses, and other large vehicles. The required form, Form 2290, is available to be filed on paper but the IRS encourages electronically filing. Taxpayers who report 25 vehicles or more must e-file.  

This year due to facility maintenance taking place over the Labor Day weekend, the IRS asks that the electronic forms be filed before 1p.m Eastern Time on Friday, August 31. For those who miss the 1p.m. deadline, guidelines on how to e-file for an extension will be announced soon.  The August 31 deadline for paper filers remains unchanged.

Don't Be Rocked By a Hurricane

With Isaac hitting the Gulf Coast, it’s an important reminder to Carolinian that hurricane season is in full swing.  September is National Preparedness Month and in honor of that, here are some tips from FEMA on preparation for a hurricane or tropical storm;

• Stock up on plywood so you can board up windows and doors at a moments notice. The American Red Cross recommends that the plywood be 5/8 inches thick. In a pinch, duct tape or packing tape can also minimize shattering glass in the event of a strong wind.
• Make sure to bring in outside items that can be picked up and thrown around in the wind. This list includes garden decorations, tables and chairs, and other items.
• As the storm approaches, turn your refrigerator to its coldest setting in case the power goes off. Store accessible items, like sandwiches items, snacks for kids, medications or baby formula, in a cooler to reduce the necessity to open the refrigerator door.
• Fill your bathtub up with water before the storm hits. You’ll be able to use this water to cook, flush toilets, or even to drink if the power goes out.
•  Fill up your car with gas. If you or your family is forced to evacuate at the last minute, there may not be any gas stations available if the power is out.
•  Review your evacuation plan and learn alternate routes, just in case.
•  Identify the nearest shelter to evacuate to if the weather takes a turn for the worst. Most communities also offer pet-friendly shelters so the whole family can be safe.
• Make sure you have a three day supply of water (a gallon for each person in your household), dry goods and canned food. If you have a pet, make sure they have enough water for three days as well.
• Make sure that your flashlight, battery powered radio, and cell phone batteries are fully charged.  Be sure to keep extra batteries nearby as well as a first aid kit. If you opt to light your home with candles, make sure you have a fire extinguisher handy.

     With the advances in technology, there are several android and iPhone apps that allow you to stay updated on the weather conditions during a storm. Hurricane – American Red Cross is a free app available for both Android and iOS devices which allows you to not only track the hurricane but  also check on weather conditions in your area  and locate help if needed. This app also lets you notify friends and family that you are safe. This app is available on the App Store and the Google Play Android Market and is completely free.