A Visit From St. Nicholas

'Twas the Night Before Christmas, and all through the house, not a client was stirring, not even a mouse

The stockings were hung by the chimney with care, in hopes that more tax shelters soon would be there

Dependents were nestled all snug in their beds while visions of tax-free gifts danced in their heads

And I in my kerchief (and also my cap) had just settled down for a long winter nap

When out on the street there arose such a clatter, I sprang from my bed to see what was the matter!

Away to the window I flew like a bee, knocked over my laptop and even my tree

The moon on the breast of the new fallen snow gave the lustre of mid-day to objects below;

When, what to my wondering eyes should appear, but a recaptured sleigh, and eight tiny rein-deer,

With a little old driver, so lively and quick, I knew in a moment it must be St. Nick.

More rapid than refunds his coursers they came, and he whistled, and shouted, and called them by name:

"Now! Cost-Seg, now! S-corp, now! Roth IRA, Gift-leaseback! Self-rental! now 401k!;

To the top of the porch! To the top of the wall! Now dash away! Dash away! Dash away all!"

As tax cheats before the grim auditors fly, when they meet with subpoenas, mount to the sky;

So up to the office the coursers they flew, with the sleigh full of loopholes — and Santa Claus too:

And then in a twinkling, I heard on the roof the prancing and pawing of each little hoof.

As I drew in my head, and was turning around, down the chimney St. Nicholas came with a bound:

He was dress'd all in fur, from his head to his foot, and even his ten-key was covered with soot;

A briefcase of papers held tight in his hand, all big words and numbers you don't understand:

His eyes — how they twinkled! His dimples: how merry! His cheeks were like roses, his nose like a cherry;

His droll little mouth was drawn up like a bow, as if daring the Tax Court to try and say "no";

The stump of a pen he held tight in his teeth, and a register tape wrapped his head like a wreath.

He had a broad face, and a little round belly (He writes off his breakfasts with honey and jelly!)

He was chubby and plump, a right jolly old elf, and I laugh'd when he saw him in spite of myself;

A wink of his eye, and a "no change" letter, soon let me know I could start feeling better.

He spoke not a word, but went straight to his work, fill'd all our stockings; then turn'd with a jerk,

And laying his finger aside of his nose, and giving a nod, up the chimney he rose.

He sprang to his sleigh, with his coat free from ash, and he looked just as dazzling as fresh tax-free cash:

But I heard him exclaim, with no hint of a stress — "Merry Christmas to all, and be sure to pay less!"

The Twelve Days of Taxmas

Every year, PNC Bank publishes their "Christmas Price Index" to track the cost of the Twelve Days of Christmas. For 2019, it's a hefty $38,994. (And you thought your holiday spending was out of control!) The index may not be completely accurate — for example, the ten lords-a-leaping are valued using the cost of male ballet dancers, rather than board-certified British lords. As for the eight maids-a-milking, well, "cows not included." But still, it got us wondering . . . what sort of taxes are we looking at on the whole affair?

• Twelve drummers drumming and eleven pipers piping make quite a racket every holiday season. Hiring all that help will stir up a cacophony of FICA taxes!

• Ten lords may look perfectly happy while they're leaping. But surely they must pay a king's ransom in inheritance taxes — after all, they are lords!

• Nine ladies dancing make a lovely sight at Christmas time, especially if they're Rockettes. They also pay a cabaret tax for the privilege of displaying their talent.

• Eight maids-a-milking help make sure we have plenty of tasty eggnog to drink. Good thing so many states offer dairy tax credits to squeeze the cows on to higher holiday production!

• Seven swans-a-swimming? Six geese-a-laying? If we accept the rule of thumb that two birds per acre of pond is a manageable number, then we're looking at some serious property taxes to host our holiday flock!

• Who doesn't want five gold rings under the tree? But selling those rings can be an expensive proposition. Remember, jewelry held for personal use is still subject to 20% tax on long-term capital gains, plus an extra 3.8% "net investment income tax"!

• Four calling birds use a lot of cell phone minutes over twelve days. (They're calling birds, so unlimited texting won't help.) Naturally, that means a 5.82% federal excise tax, plus state and local sales tax too.

• Three French hens add a sophisticated "continental" touch to anyone's holiday festivities. But don't forget the import duties you pay to bring foreign livestock into the country!

• Two turtle doves are famed among bird watchers for forming strong "pair bonds," which makes them a symbol of devoted love. (That's why they're in the song.) Too bad that means they pay that pesky marriage penalty that hits high-income couples who file jointly! (Okay, we know this this one's a stretch. But we've got twelve days of taxes to fill here, so cut us some slack.)

• Nothing says "Christmas" like a partridge in a pear tree. And our tax code is full of juicy incentives for growing pear trees. You can deduct operating expenses associated with your crop; you can depreciate equipment and land improvements you use to manage your groves; and you can even take generous charitable deductions for rights you give up for conservation easements. Why, the tax savings alone should be more than enough to pay for the partridge!

Yes, even Twelve Days of Christmas just means twelve more opportunities for the taxman. So here's wishing you and your family the best this holiday season. We'll be back in 2020 to make sure you pay as little tax as possible, not just during the holidays, but all year long!

A Different Kind of Holiday Party

Your kids have finally finished eating their Halloween candy, which means that the real holidays are right around the corner. But before you sit down to open presents, December 16th marks the 244th anniversary of an important holiday in tax history — a pop-up costume ball in Boston Harbor called the Boston Tea Party.

From 1698 through 1767, Britain's Parliament passed a series of laws giving the East India Company a monopoly on the British tea trade, forcing the colonies to buy their tea from British wholesalers, and slapping hefty taxes on it all. But Dutch traders, who paid no tax, could sell their tea for less, costing the East India Company a fortune. (If you remember Miami Vice in the 1980s, try picturing a colonial-era Crockett and Tubbs, dressed in fly white buckskins, chasing Dutch bootleggers in a sleek Italian brigantine.)

In 1767, Parliament passed the Indemnity Act to lower the tax on tea to compete with the Dutch. (Earl Gray was just three years old, so he didn't vote.) But they needed a "payfor" to make up the lost revenue, so they brewed up the Townshend Acts taxing colonial imports, including tea. (Hmmmm . . . sounds like the sort of horse-trading today's Congress is up to right now with the Tax Cuts and Jobs Act.) Five years later, the Indemnity Act expired, and everyone was back where they started. (Sort of like what happened in 2013 when the Bush tax cuts expired . . . . )

The Tea Act of 1773 brought things to a head. The new law actually lowered the price of tea to undercut the smugglers. But the colonists still hated Parliament taxing them without their consent. They hated how England used those taxes to pay colonial governors and judges, thus insulating them from local influence. And that's where things stood in November, 1773, as the tea ship Dartmouth sailed into a Boston Harbor steeped in resentment and controversy.

British law required the shipper to unload and pay the tax within 20 days. But colonists, who gathered by the thousands, were determined to prevent that. On the night of December 16, the final deadline, a group of 30 to 130 of them boarded the Dartmouth and two more ships. A few of them sported elaborate Mohawk warrior costumes to hide their faces and show their loyalty to American identity. They spent three hours dumping 342 chests of tea into the water. The next day, future President John Adams wrote in his diary:

"There is a Dignity, a Majesty, a Sublimity, in this last Effort of the Patriots, that I greatly admire . . . . This Destruction of the Tea is so bold, so daring, so firm, intrepid and inflexible, and it must have so important Consequences, and so lasting, that I cant but consider it as an Epocha in History."

The Tea Party set all sorts of consequences in motion besides the obvious "American Revolution" thing. (Does that remind you of Taylor Swift's song, "We Are Never Ever Getting Back Together"?) If you're a coffee drinker, for example, you should know that coffee first became popular here as an alternative to "unpatriotic" tea. (Sort of like renaming french fries "freedom fries" during the Second Iraq War . . . . )

244 years later, we still resent paying taxes we don't have to pay. The good news is, you don't have to don a Mohawk headdress and row out into the middle of the harbor for three hours of creative vandalism to pay less. You just need a plan. So call us when you're ready to save, and let us give you something to celebrate!