New Tax-Free Employee Benefit To Pay Up To $5,250 Towards Your Staff’s Student Loans Expires On 12/31/20

he CARES Act included a provision allowing employers to repay up to $5,250 of their employee?s student loans as a tax-free benefit. That?s a great benefit for any staff member burdened with student loan debt. Practice owners benefit too since they can write off the full amount paid without owing any payroll taxes on the loan repayments made.

Only loan repayments made prior to December 31, 2020 qualify for this valuable benefit, so you need to act quickly. Another requirement is for the student loan to be in the employee?s name, which means that loans taken by their parents don?t count.

Please note that your practice will also need to have a written document drafted for this ?Section 127 Plan? to take advantage of this tax-advantaged employee benefit. Please email our payroll team at? we can refer you to an H.R. Specialist to prepare this document for you if you are interested in providing this valuable and tax-advantaged employee benefit.

States Are Being Inundated with Fraudulent Unemployment Claims

Beware.? We?ve now heard from multiple clients that fraudulent unemployment claims were filed under their name and SSN. Scary stuff. Here is the advice we?re giving to those clients:

  1. Visit your state’s Dept. of Unemployment Assistance and search for “how to report a fraudulent claim”
  2. It probably makes sense to freeze your credit too.

Andrew Schwartz To Present Free Online CPE Seminar on Growing A Niche Practice


Thursday, Sept. 26, 2019

11:00 am ? 12:00 pm (Pacific

Price: FREE


In a profession where many CPAs and accountants operate as generalists, specializing within a niche can provide a huge competitive advantage.??Many firms have realized that the more focused their practices become, the more their practices grow.? Plus, clients and prospects will travel further, wait longer, and?also pay higher fees to work with a specialist.

In this course, Andrew Schwartz CPA shares how he generates meaningful industry specific benchmarking information to help clients and prospects within his niche better understand how their businesses are doing. Many viewers will leave the course with a new excitement to?commit to a niche?and will realize how easy it is to turbocharge their specialty by benchmarking.

After attending this event you will be able to:

  • Recognize how specializing within a niche is preferable in today?s competitive business environment
  • Discover easy and efficient ways to benchmark
  • Identify four categories of benchmarking data
  • Learn from real-life benchmarking examples created by Andrew for his niche client base

Sign Up for Free One-Hour Webinars on Various Financial Planning Topics

I’m pleased to announce that my CPA firm Schwartz & Schwartz PC?and First National Corp.?are teaming up to coach you and your family members on how to improve your financial well-being and knowledge.

Please register for the topics and sessions you’d like to attend online as a live webinar or in person at Schwartz & Schwartz’s office in Woburn, MA.

Sessions through April include:

  • The Quick & Dirty Personal Financial Checkup (Live 2/13 @ 7 pm, Webinar 2/14 @ Noon.)
  • The Game of Loans: The Stark Truth About Student Loan Refinancing (Live 2/28 @ 7 pm, Webinar 2/27 @ Noon.)
  • Estate Planning: Intro to the Essentials (Live 3/13 @ 7 pm, Webinar 3/14 @ Noon.)
  • Preparing for the Rising Cost of College (Live 3/28 @ 7 pm, Webinar 3/27 @ Noon.)

We encourage you to attend as many of these sessions as you like – they’re free! Topics are offered online a a live webinar and also in the Schwartz & Schwartz offices (8 Cedar Street Suite 54 Woburn).

Buying and Selling Mutual Funds at Year End ? Be aware of Year-End Distributions

With the year-end upon us, many investors see it as the time to rebalance their investment portfolios.? However, savvy investors need to be aware of just when the timing is ?right? or ?wrong? to make that buy or sell trade happen.

Mutual funds are required by law to distribute the income earned within the fund each year to the shareholders of the mutual funds in the form of dividends and capital gain distributions. ?Typically, the bulk of these distributions occur near year end, late in the month of December.? The dividends and interest earned within the mutual fund as well as capital gains from sales must be distributed to the shareholders.? At the time of the distribution, the net asset value (NAV) of the fund decreases by the amount of the per share distribution because those assets are no longer held within the fund.? The result is taxable income to the shareholder and a reduction in the NAV of the mutual fund.

Thus, the date to be aware of is the ex-dividend date ? the first day that buyers of the mutual fund will not receive the dividend being paid out by a mutual fund.

Buyers will want to wait until after the ex-dividend date to buy into a mutual fund.? After that date they are buying into the fund at a lower NAV, because of the dividend distribution.? If they buy the mutual fund prior to the ex-dividend date, they are buying the fund at the higher NAV, receiving a taxable distribution, and then being left with the mutual fund at the lower NAV.? The major dilemma of purchasing before the ex-dividend date is that although the buyer will receive income in the form of a dividend and/or capital gain distribution, he will also have to report the income on his tax return and pay taxes on that distribution. ???After having been hit with a tax bill on the distribution, the buyer would be left with less money in his wallet than if the mutual fund was simply purchased without the dividend payment.

The opposite is true for sellers.? Sellers want to sell their mutual fund shares before the year-end distribution.? Selling before the ex-dividend date end will result in the entire gain being subject to lower capital gain tax rates.? Waiting until after the ex-dividend date, the seller will receive a taxable distribution.? This scenario would result in income from the sale of the mutual fund being taxed at a capital gain, but the dividend distribution portion being taxed at a higher ordinary income tax rate.

Bottom line is as follows ? buyers want to purchase shares after the ex-dividend date while sellers should sell shares before the ex-dividend date.? Following these rules should help investors to lessen their tax exposure on their mutual fund income.