Since the legal issues for Jon and Kate have largely waned, there's not as much legal mumbo-jumbo to analyze on the blog. So I'm jumping at the chance to break down the legal implications of Kate's so-called "freebies." This issue keeps coming up (and keeps getting misstated). The following information can be found easily by simply reading the U.S. Tax Code, which I've provided links to if you have any further doubts.Misconception: Kate's "freebies" from TLC, such as her haircut, clothes, and manicures, are just that, freebies. Kate supporters will then go on to say that this is not the children's money because it's just a gift from TLC.
FACT: According to the IRS, a true gift is something given without expecting anything in return. It cannot be in exchange for something else--i.e., work. Since a reasonable person would not except an employer to give a gift worth in the 10's of the thousands of dollars (such as her hair stuff), a reasonable person would conclude that Kate's "freebies" from TLC are in exchange for her "work" for them, i.e. filming the show. The freebies are not gifts. A reasonable gift from an employer would be something like a Christmas ham around the holidays, not hair extensions. If Kate and/or TLC tried to tell Uncle Sam her $7,000 haircut is a gift, they would probably be laughed out of the office. By the way, it would be different if a random donor gave her the haircut completely independent of TLC, her employer.
Misconception: There are no tax consequences when TLC gives Kate a "freebie."
FACT: Not so fast, there are tax consequences for these so-called freebies any which way you slice it. Even if by some stretch of the imagination the IRS finds that TLC's freebies are gifts (which I don't believe they are), TLC would have to pay a gift tax on everything that exceeds $13,000 this year (in the year 2010). So as soon as the gifts add up to a fair market value of 13k, they have to start paying. Cha-ching! Think TLC wants to do that? Yeah, right. Instead, they are probably including any freebies in Kate's total annual income. Since these freebies are in fact not gifts, they are income, it is taxable just like any traditional income is and TLC has to issue a W-2 or possibly a 1099 which includes the fair market value of the gifts, and Kate has to pay taxes on it. Just because something is a good or service, such as a haircut, does not mean it is not income. Income can be cash, a gift card, a haircut, a manicure, electric kiddie cars, a bodyguard who is really your assistant, plants for your landscaping, or anything that gives you a benefit. The key is: Are you giving these things to someone to do something for you in return. Clearly Kate is doing something for TLC in return for all this junk.
Misconception: Even if Kate paid for these things out of pocket, they are tax deductible business expenses.FACT: Careful, Kate! The Tax Code is very clear that expenses incurred to maintain an image are not to be deducted from taxes. In fact the IRS even specifically name folks in the entertainment industry, probably because they have repeatedly tried to get away with this very thing (Yikes, that's embarrassing--the IRS calling you out by name!). "Taxpayers in the entertainment industry sometimes may incur expenses to maintain an image. These expenses are frequently related to the individual's appearance in the form of clothing, make-up, and physical fitness. Other expenses in this area include bodyguards and limousines. These are generally found to be personal expenses as the inherently personal nature of the expense and the personal benefit far outweigh any potential business benefit. No deduction is allowed for wardrobe, general make-up, or hair styles for auditions, job interviews, or "to maintain an image".
The bottom line? Kate's freebies are in fact income in exchange for working for TLC, and not freebies at all. She must pay taxes on them. And if it is payment, then didn't the children work for it by participating in filming? We sure think so. At least 8/9ths of all this income belongs to them, no? So when we say the children are working their little booties off to pay for Kate's hair extensions, it's because they are. At least 8/9ths of it.
Note: We are in no way suggesting Kate isn't paying her obligations to the IRS. We have no idea. We're just saying, her freebies are income and taxable. We suggest she consult a CPA.
129 sediments (sic) from readers:
Hilarious! Brace yourselves for Kate making the rounds of all the talk shows and tabloid magazines to sell her 'poor is me' routine come tax time! She hasn't shown a shred of shame for any or her, um, inconsistencies yet, I doubt she'll learn any honor, honesty (despite starting every sentence with 'honestly'), or integrity by next April.
Hopefully she isn't listening to the sheeple who are telling her all this stuff is just a freebie gifty!!!
"You suggest she consult a CPA? She needs you to tell her that she should have an accountant?
I would think by now she would have learned the importance of having a good attorney on retainer, especially after signing those intial contacts sans an attorney. That would include a financial planner, estate attorney, AND tax attorney, as well as a CPA.
I am clergy in a "Mainline" denomination, so I have a different situation than many. I am an employee of the Church and yet I am self employed through that same job. My taxes reflect both.
Because I have income from my job, I file a 1040 just like everyone else. Because I live in a church parsonage free of charge, I must also pay self employment tax on the fair rental value of the house PLUS my income and the utilities allowance I get every month.
Every time I perform a wedding, a funeral, give a speech or other service and receive an honorarium (even in cash, which is frequent) I must report that as extra income. I have to be sure to write it down so I don't forget I got that money.
The ONLY money that crosses my palm that I do not have to report to the IRS is my business
mileage. That is between the church and me, and I must keep accurate and timely records of the business miles I put on my car if I want to be reimbursed. I usually do not turn in mileage, but the IRS is unconcerned about that.
The only clothing I can deduct is my pulpit robe, since it cannot be considered "street clothing" by any reasonable assessment.
My point is that some of us have more complicated income, but the IRS knows about all of it. They have provided ways for us to pay what we legitimately owe. To even think of
skirting the responsibility to pay every cent of our legal taxes is beyond my understanding.
The Gosselins have complicated income, what with the "love offerings" and the perks. I trust they have professional help to figure it out. They do not want to call attention to themselves, because the IRS doesn't kid around.
When Oprah gives away big ticket gifts she arranges to pay the taxes for the winners. When she gave away a studio full of Pontiac G-6's she paid the tax for all of them. Do you think TLC has some similar arrangement with the IRS?
I think when Oprah pays the taxes on her gifts she is giving each person a gift of maybe around two grand, if that. So she is well under the 13,000 dollar limit. It is PER PERSON, not in genral. But TLC is gifting this to one person, Kate. If they gifted the taxes to her they might be able to get away with that but they could only give up to the 13,000 worth of taxes. Once taxes are over 13,000 that's it, it starts becoming taxed.
The point of this post is really to dispel this notion that the children are not paying for Kate's hair because it's a "gift" from TLC. No it's not it's INCOME the kids earned.
In Maddy's book... "Surprise, our Christianity was just for the cameras... Our Mother hated being with us.... Our parents marriage was just for the cameras.... Our parents didn't bother raising us...."After my mother went to jail for tax evasion our lives changed.....
On one of the blogs that Jon used to participate in (I think the multiples blog that removed Jon's posts after Jon felt he was too famous), Jon complained about getting 1099 from the room makeover they had...so at least Jon knew/knows the IRS rules a little and that's probably why they asked for cash when selling their family photos and taking love offerings -- no paper trail.
I love this because I think the "free" stuff very much outweighs the real $ earned. So, if they have to pay tax on the "things/stuff" they have to dip into their vaults to pay for it. It's not like you have deductions taken off each paycheck and then there' no big surprise/tax bill at the end of the year. She gets these things throughout the year/years (kitchen, trips, vehicles, clothing, mini cadillacs...) and when it's all calculated as INCOME she will owe!!
I don't know if she will claim all the freebies cause I'm sure TLC has accountants that can work all around that stuff but, she can claim part of her mortgage as a business because she works from home and they do film there..
mama mia said...
In Maddy's book... "Surprise, our Christianity was just for the cameras... Our Mother hated being with us.... Our parents marriage was just for the cameras.... Our parents didn't bother raising us...."After my mother went to jail for tax evasion our lives changed.....
You didn't complete your sentence. You should have ended it "for the better".
Why does everyone assume that the hair, mani/pedi's, tanning, clothing, vacations, home projects are either paid for by the kids or are gifts from TLC that Kate is not paying taxes on? I'm not an accountant or tax attorney but it seem logical that many of these are business expenses that TLC would pay out to make/market Kate who is their product. Kate wouldn't need to pay taxes on that and TLC would probably be able to take the expense as a business deduction.
My hubby's company sends employees away for training and provides the items needed to perform their job duties all the time and no employee has to declare any of it as extra income. Kate and TLC most likely have the same type of situation. Remember TLC is a company and Kate+8 is their product. Companies spend money to make their products and market.
Wait, Kate's freebies aren't free? Waaaaaaaahhhh!!! It's just her alone with eight kids and THAT'S NOT FAIR!!! (roll eyes)
JMHO...."I'm not an accountant or tax attorney but it seem logical that many of these are business expenses that TLC would pay out to make/market Kate who is their product."
JMHO, please read the post again. Manis, pedis, hair, etc are NOT business expenses and NOT tax deductible, the IRS is very clear on this. The IRS says they are too personal in nature to try to pass them off as business expenses.
And hold up on claiming the mortgage, doesn't TLC pay for that too? You can't claim something someone else is paying...in fact you just have to pay MORE taxes on it as income. Psyche!
There are SOME things Kate can claim like say her flight to LA to do a book signing. But the haircut prior, NO.
Just to be clear, JMHO, a lot of business expenses ARE tax deductible. I'm guessing your hubby is paying for hotels, meals, conference fees, etc. for his employees which are all fully or in part tax deductible.
But this is why someone like Kate should have a good CPA because it starts to get complicated. Not everything you ever spend money on the IRS will count as a business expense....in fact a limo ride to the airport just to maintain your image so you don't pull up in a crappy toyota, they specifically say is NOT a business expense. Neither is hair, makeup and clothes. Try to claim them and expect Uncle Sam to come a-knockin.
And by the way if your employer claims it, or reimburses you for it, don't try to go to the IRS and double dip getting it claimed again.....oops!
I think what started people thinking there was monkey business going on was the "cash only" requests.
Guess what Jon and Kate? Just because it's cash only don't mean it's not TAXABLE It's just easy to get away with cheating the government that way, just like you cheated little old church ladies out of it in the first place.
Administrator said...
JMHO...."I'm not an accountant or tax attorney but it seem logical that many of these are business expenses that TLC would pay out to make/market Kate who is their product."
JMHO, please read the post again. Manis, pedis, hair, etc are NOT business expenses and NOT tax deductible, the IRS is very clear on this. The IRS says they are too personal in nature to try to pass them off as business expenses.
And hold up on claiming the mortgage, doesn't TLC pay for that too? You can't claim something someone else is paying...in fact you just have to pay MORE taxes on it as income. Psyche!
There are SOME things Kate can claim like say her flight to LA to do a book signing. But the haircut prior, NO.
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You are missing the poster's point. If TLC wants Kate on the cover of a magazine with new hair as a marketing gimmick, they can pay for that to market their product (Kate) without it being a taxable "gift" to Kate. That is not the same thing as Kate choosing to get a haircut because she wants to "maintain her image." You are making some assumptions based on your reading of the tax code that may be faulty. I'm not an accountant, but then again neither are you.
I would imagine that the terms of a person's contract factor into the equation. For example, if an actor is obligated to keep their hair a certain hair style for continuity, that is in fact a business expense as it's a job requirement. Everything is not as cut and dried as your reading of the tax code would make it seem.
Administrator said...
And hold up on claiming the mortgage, doesn't TLC pay for that too? You can't claim something someone else is paying...in fact you just have to pay MORE taxes on it as income. Psyche!
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How do you know who is paying the mortgage?
I'm sure Kate lies about her income to the IRS like she lies about everything else in her life. Why would she do anything different?
Babsy said...
On one of the blogs that Jon used to participate in (I think the multiples blog that removed Jon's posts after Jon felt he was too famous), Jon complained about getting 1099 from the room makeover they had...so at least Jon knew/knows the IRS rules a little and that's probably why they asked for cash when selling their family photos and taking love offerings -- no paper trail.
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Babsy, I remember reading that thread from the multiplies blog as well. The posters there were talking about a family with multiplies who had been selected to receive a new home from "Extreme Home Makeover." The show had just started a few months before the tups were born. From what I gathered, Jon and Kate had applied but were never even contacted for an interview. Jon was trying to act like they didn't care they weren't selected and wrote about feeling sorry for the other family because of having to pay taxes on the renovations like they had to for the "Home Delivery" show. He didn't understand why he should pay taxes on materials that were donated to the show. He then went on to say something about how their privacy was more important than material things (hahahahahaha! liar liar pants on fire!) Basically, he acted like a big, jealous tool. I hope someone has saved those threads, along with the old sixgosselins.com website before they were taken down.
What I meant in my earlier post was not that Kate would be taking anything as a business deduction but that TLC would be writing off the cost of many of these items as business costs for "making and marketing" their product Kate.
Why would TLC need to "gift" everything to Kate when she is an employee/product of TLC?
Thanks to poster Complexity who I think was trying to explain me more clearly. :)
One question, what if the freebies are given from different businesses? For example, GE gives a washer and dryer, a toy store gives the electic riding cars, a nursery the plants for landscaping, etc. If they are not directly from TLC but come from individuals (I'm sure at TLC's request as they will be given free advertisement when mentioned on the show) and don't exceed the maximum for a nontaxed gift then they wouldn't have to be claimed as taxable income? A person can receive a gift of money up to something like $10,000,00 per year from someone without claiming it as taxable income so could that person also receive multiple material gifts or money from multiple sources and still not have to claim it because it isn't coming from just one individual? Hope I explained this clear enough.
I am a sales rep and when we win trips outside of the city, it is taxed as income. I can't claim my wardrobe as an expense even though I have to keep up a certain image for the job. Kate and TLC are milking this and I hope a savvy IRS person can see through all of it. She put a dance floor in her house for DWTS and then it was removed when she was eliminated- how much was all that and did ABC pay for it? I was suspicious when I heard they only accepted cash at the churches- that was just despicable (?). Ripping off people in the name of G-d! I saw her on the cover of OK with it saying it had been a year since her split- I thought they had split 2 years before when she kicked him to the curb and then staged all the fake shows. People need to stop watching her- I know I have. I loathe this woman and her entire brand!
That is the whole point it's complicated. I cannot possibly explain all the nuances of the tax code here. I've explained a few general misunderstood rules. But if Kate tries to get all these expenses past uncle sam expect an audit!
I just want one of the tabloids to print how she is getting away with all of this! Hopefully, that will make people mad enough to finally stop watching her! You can't feel sorry for someone who is stealing from the system- especially since she hasn't bothered to downsize her lavish lifestyle. I remember when it was disclosed about all the things Jim Baker and his wife were making- they went down fast! just sayin' Personally- I think it's disgusting that she became more famous after it was discovered that her husband was out with someone else. At least that family on the WE channel isn't anything like this- both of them still work and they don't film 24/7. I think Khate and TLC have been plotting since Jon started complaining about lack of privacy. I think TLC planted that first photo of Jon at the bar to get the ball rolling. He was dumb enough to step right into it! I loathe Khate!
Anonymous, we don't know that she is "getting away with this". She very well could have an accountant and be paying all the taxes. On the other hand, you know the more taxes she pays, the less the kids get (aside from the mandated amount)!
I am still wondering why KKate is still running around asking for money for the kids' college funds, when the state already said they would pay. False advertising.
More lies.
Kelly said...
I'm sure Kate lies about her income to the IRS like she lies about everything else in her life. Why would she do anything different?
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I agree Kelly.
Since I did this on GWOP a year ago, I will do it here too:
HEADS UP TO ANY IRS AGENT WHO IS READING THIS BLOG - There is more than enough evidence on ALL the Gosselin blogs, both pro and con, that this family needs to be audited by the IRS each and every year, past, present and future.
Any family that feels this ENTITLED to "gifts", "coupons", "love offerings", "freebies", "perks" and of course the "$20 cash only for a photo", and all because Kate more likely than not manipulated medical science to have the six pack in the first place so she did not have to work a real job, IMHO needs to be audited.
Yes IRS, you better believe that as a taxpayer I believe that Jon and Kate Gosselin need to be considered a priority and should be audited. I also believe that the Gosselins should be audited before any other family who is financially suffering the consequences thanks to this economy, any acts of God such as tornados, or the families that are impacted by the BP mess in the gulf. These families have enough to deal with, and Jon and Kate have a lot of time on their hands to be audited since their children support their lavish lifestyle.
JMO.
ANYONE can report potential tax fraud on Jon and Khatezilla Go$$elin. I did it on someone and they got audited (money under the table for their nanny). Call ANY IRS tax fraud number and REPORT these two jerks NOW.
You watch. If and when the IRS audits Kate and Jon, they'll backpeddle faster than a circus clown on a unicycle and claim that the money is their kids money, not Jon and Kates and then blame the kids for not reporting the income
PatE said...
I am still wondering why KKate is still running around asking for money for the kids' college funds, when the state already said they would pay. False advertising.
More lies.
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This has been answered hundreds of times. The State of Pennsylvania Did Not say they would pay for the kids education. They Did set up TAP accounts for the kids and told people how THEY could donate to those accounts. It is possible the State could have started the accounts with a nominal amount of money, but that has never been answered.
Complexity, the IRS doesn't look at the grey areas, they look at the black and white. This is what the tax code say PERIOD! Truse me, I work for the Government.
It indeed is a complex issue, and we can speculate all we want about how it is set up, who is taxed, what qualifies as taxable income, etc. etc. The bottom line is that we do not know the business relationship between TLC/Kate and her product/brand. That's for them to know and for us not to find out.
Is it possible that TLC pays her a per diem per month, which would include expenses such as gasoline, haircuts, meals, in order to maintain her brand? She is TLC's employee and as such, according to tax laws, a per diem would not be taxable income to her. However, if an employer pays expense allowances that exceed the federal per diem rates, the excess amounts are subject to income tax and employment tax if they are not repaid to the employer, unless the employee actually substantiates all of the expenses covered by the per diem allowance. Would she be able to do this? I'm sure they would try to get it deemed so, since those hair extensions, according to Kate and TLC, were necessary for maintaining her brand in the DWTS gig.
For example, when she drove for the photo-op (at Whole Foods) did TLC pay for the gas? It certainly wouldn't have come out of her own pocket. It's not a freebie, but it's not taxable income. Likewise, what about the wear and tear on her car? What about gas money when she makes her media trips to Target? Is this considered part of their business arrangement? How about dinner out with Jamie? Would this be included in the per diem, if there were one?
I would imagine that by now TLC/Kate and her attorney and the IRS would have it all sorted out. I'm wondering, though, about those darn cash love offerings at churches. If an audit wasn't done on those, I would certainly think they should be!
"The State of Pennsylvania Did Not say they would pay for the kids educationn."
Correct. Our tax dollars DID NOT go to the kids' college education fund. The state is NOT paying for their education. The fund is there for DONATIONS.
We did, however, through taxes, pay for the first year of infant care for the children, and if she would have had her way, we most likely would still be paying! Thank goodness the government cut off those payments after the first year.
Whevever cash donations are collected at our church (for missions, for Christmas gifts to staff, whatever), the Treasurer is the one who gets the wad of cash. He runs it through the church books and then writes a check to the
recipient from the church account. While that may not be required, it keeps things above board. In a church, openness is the way to go.
Never does cash go out the door uncounted and unrecorded. I feel letting the Gosselins walk out with cash that had not been recorded was
irresponsible on the part of the church.
Lily said...
Complexity, the IRS doesn't look at the grey areas, they look at the black and white. This is what the tax code say PERIOD! Truse me, I work for the Government.
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I'm supposed to take your word because you work for the government? Sorry, but unless you're an accountant or work for the IRS (just because you work for the government doesn't mean you know anything about tax law) I have no reason to value your word over anyone else's.
As for the IRS not working in gray areas...does the term "loop hole" ring a bell? Tax law is hardly black and white.
Moon and Mango said...
It indeed is a complex issue, and we can speculate all we want about how it is set up, who is taxed, what qualifies as taxable income, etc. etc. The bottom line is that we do not know the business relationship between TLC/Kate and her product/brand. That's for them to know and for us not to find out.
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Exactly.
It is possible that Kate and Jon both are issued a corporate credit card by Discovery Communications to cover expenses such as travel, hotel, meals away from home, haircuts and even shopping for brands they are using for product placement, thus, she doesn't have to claim any of this as income. TLC gets the write off and Kate and Jon get the freebies.
My company issued me a corporate credit card and that's exactly how I cover all my expenses, including fuel, lunch and dinners while on the road, hotel stays and client entertainment. I have to submit an expense report monthly with receipts, and I'm given a car allowance as well. The down side to that is that I can only deduct my mileage at the end of the year as I'm not compensated for that.
The only thing I know about deductions for regarding clothing and hair, etc is you can claim "wardrobe" if it's a costume that you wouldn't wear anywhere but DWTS, etc. You can't claim it as "wardrobe" if it's something you wear as street clothes (shopping, dining, etc). If you wear a dress to an event such as a red carpet you can't claim it because you can also use that dress to go to a private event such as a wedding. You can claim a "uniform" if it's an actual "uniform" but you can't claim a suit as a business man because you can wear that suit to a private event such as a wedding. Kate could claim a wig or hair extensions if they are part of her "costume" like a red, curly wig because she's a clown. She can't claim hair extensions if she wears them anywhere else but to work (again like shopping, dinner, her backyard). At least that's what my understanding is.
"It is possible that Kate and Jon both are issued a corporate credit card by Discovery Communications to cover expenses such as travel, hotel, meals away from home, haircuts and even shopping for brands they are using for product placement, thus, she doesn't have to claim any of this as income."
Kelly...would this work the same way as a cash per diem, only in the form of a card? With a cash per diem, some accountants require proof that the funds paid to the employee are actually used for the designated purpose. Others find a way around it. It all depends on the agreement worked out by the company's tax attorneys and accountants, and the ones hired by the employee.
I could be wrong, but I don't think Kate can "write off" her washer and dryer if she received them as freebies because she uses them for personal use, not just on the show. If she ONLY used them to show her doing laundry on the show then I think she can claim them.
Regarding Jake the Bachelor and Kate possibly dating. I found this on radaronline.com:
“He actually confided in me about a month ago when he was thinking about ending things with Vienna, saying he just couldn’t be intimate with her anymore because he lost that fire for her,” the source told RadarOnline.com.
“She would break him down, undermine him, make fun of him, and it really took a toll on him. Don't get me wrong, Jake’s a confident guy, but every guy knows that when a women disrespects you to that level, it's hard to make love to her and mean it,” the source says.
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And after that kind of treatment he's going to date Kate??? LOL!!! I guess he didn't watch the show to see how she treated Jon. If he did watch the show there is no way Jake is going to date Kate.
"She can't claim hair extensions if she wears them anywhere else but to work (again like shopping, dinner, her backyard). At least that's what my understanding is."
If they were put in to enhance her "brand," as an employee with TLC, yes, I think she could. They own her. She's in the spotlight all of the time. She's not going to put them in for a TLC-related gig or media event, take them out to go to a non-business related dinner, and then put them back in the next day! Same thing with hair coloring. If they want her to be blonde, they will pay for her to be blonde. She can't dye her hair for an appearance on The View, and then dye it back to brown to take the kids to the bus stop!
I'm sure they have found a way around this...
Moon and Mango,
I'm not at all sure about the cash per diem in the form of a credit card. When I am traveling for business, I can stay in any hotel I choose however, my meals have to stay in the 75.00 range per day and breakfast is not included as most hotels provide continental breakfasts anyway.
There are some companies that will give an employee a cash advance to be used for a particular trip and at the end of the trip, whatever wasn't used, some companies will allow the employee to keep it, others require it back but in all cases, receipts are required on anything over 25 dollars.
If I'm entertaining clients, there is no limit on the expense I can incur however at the end of the month, the comptroller doesn't want to see $100 bottles of wine being purchased either en masse for that evening of entertainment.
Moon and Mango,
I really don't "know" for sure but my understanding is that to deduct something you must ONLY use it for work purposes and it can't be used for any personal use. I think that's why they have "wardrobe" on all the various tv shows. The hosts/stars do not get to keep the clothing (at least they aren't supposed to).
I think in some cases you can deduct based on percentages but not in full. I'm really not 100% sure but I will say that I agree with you, I'm sure they have found a way around this too... ;)
If it gets them both camera time and tabloid articles written about them, Jake and Kate will go to the ends of the earth to stay in the limelight. The two of them are cut from the same cloth. I'm sure the suits at ABC are right now in a meeting, thinking of a production they can come up with involving Kate and Jake aka JATE.
Kate hasn't had the baloney pony in nearly two years and Jake ain't givin his up. They're ideal for each other.
She couldn't claim the extensions anyway since TLC paid for them. ;)
Now, if TLC paid for the washer/dryer to use as props for the show, well than.....oh hell, this thread is kind of scraping the bottom of the barrel, isn't it?
I am pretty certain that Kate pays for her nails and tanning, gas and even her mountain of clothes, now she may get a discount of even large paper rebates at those retailers she goes to almost 4 to 5 times a week, she is just extravagant like this, plus it's a reason to leave the house. She just found this fun way of dressing up like a 3 yr old toddler dresses up ... but unfortunately she has no where to go... she is not like Kelly Ripa which gets to film a show every morning or go to a meeting or premiere every week.... Kate is primairly a nobody, so she goes to Target looking like that.
As for her taxes... I am sure some well paid people do that for her, she can't even remember to switch her kids clothes from summer to winter when they are in the middle or October. (soup and a surprise epi.)
JMO!!!
I know NOTHING about complicated taxes. However, I would think that since Kate's house is essentially a "set". Anything used on the "set" could be deducted by TLC. So Kate won't be responsible (I wouldn't think) for claiming those things on her taxes because TLC is. She is just "using" the "props". The food, clothes, extensions, botox, boobs, whatever, could all be considered wardrobe and props. Right?
From the IRS Publication 17 Chapter 26:
"Reimbursement allowance or advance."
A per diem allowance is a fixed amount of daily reimbursement your employer gives you for your LODGING, MEAL, and INCIDENTAL expenses when you are AWAY from home on business.
Federal daily per diem rates are $39 for M&IE.
"Allowance more than the federal rate."
If your allowance is more than the federal rate, your employer must include the allowance amount up to the federal rate in box 12 of your W-2. This amount is not taxable. However, the excess allowance will be included in box 1 of your W-2. you must report this part of your allowance as if it were wage income.
... then there are the differences between accountable and nonaccountable plans. Since we are not privy to Kate's contract it's all speculation. But Kate is NOT receiving a per diem while she's sitting on her butt at home. She could have a TLC expense account, credit card, tell the pedi person, Target, beautician, landscaper, etc to send the bill to TLC. Also, in January 2009 Jon made a statement that they had incorporated. That throws more rules into the mix.
mommyinca ~
What about the new kitchen, solar panels, crooked houses, chicken coop, furniture, washers/ dryers. All those little trinkets left behind after the filming was completed...
WOW mommyinca, you are so right on about all the freebies she got, lets add the clothes for the kiddies, Jons' Hardy wear, free trips to everywhere, and all the supplies she stores in her basement...= )
Not to mention the van that was donated but Kate didn't like the color. Where did that go?
To the person who asked, when a company like say Fisher Price gives them a toy electric car, is that just a freebie/gift? It's not from TLC.....well, depends! The IRS says a gift has to be given to you without the other person benefiting. If Fisher Price just gives them some cars no questions asked, yes it's probably just a gift, no taxes necessary. But if they sit down with Fisher Price even informally and they give them the cars with the understanding the cars would be featured in Paps photos and on Kate Plus 8 (which certain electric cars WERE), FP is getting the benefit of free advertising on Kate Plus 8 and in the Rag Mags. And the IRS may very well find that the fair market value of the cars is PAYMENT and INCOME to Kate.
I don't agree that the tax code is black and white, I read enough of it to know! It's Complicated, you're right, it is complicated. Which is the point I'm trying to make--to simply assume everything is a freebie without consequence is to try to slip something by Uncle Sam.
And once again, with the exception of Schmecky's example of a wig for a play because it's a costume....hair is NOT tax deductible. The IRS is very clear. Point me to the code where it says hair can be a deduction. It is your hair and if you're wearing it in your normal life, you are out of luck. The IRS ain't falling for that. I doubt Kate's CPA is dumb enough to try to sneak that one through.
"A per diem allowance is a fixed amount of daily reimbursement your employer gives you for your LODGING, MEAL, and INCIDENTAL expenses when you are AWAY from home on business."
Her home is TLC's business. She's at home, but since it's a film studio, so yes, she could be receiving a per diem while she is sitting on her butt at home. This throws another monkey into the mix. Since her home is the business (but not HER in-home business since TLC is the employer filming there) can the per diem be used for lodging (mortgage expenses), food while filming, and other expenses, such as nannies, cleaning the pool (if they are filming a swimming episode), etc.?
If the per diem given to her doesn't exceed that allowed by federal law, then at least a percentage of all of these things ARE freebies, and it's NOT the kids income that is paying for them.
I betcha that they each have excellent tax attorneys and advisors who have found the legal means to get around laws so as to be beneficial to both parties.
I just wouldn't be so fast to say that Kate has to pay income tax on everything she receives -- that there are no such things as gifts and freebies -- and as such, the kids are working for these things.
Moom and Mango what you've said about per diem is true, however, in the military, government, etc. you don't get per diem while at your home "duty station". Her home would be her "duty station" so no per diem.
Let's put it this way, TLC "freebies" Kate can't find some way to evade and avoid taxes on by some loophole, I believe are income. I also believe the vast majority of them are going to be hard to deduct LEGALLY. Could she try anyway? Sure. But watch for that audit.
And there is no way an auditor would let Kate get away with trying to say she is away from home when she is AT HOME. That is a stretch!
On another note, it's been awhile since there have been pics of the kids at the house....could they be playing in the back? Or maybe the new landscaping is helping? Hope so!
Moon and Mango ~
The HOME I (and the IRS) was refering to is your TAX HOME. That is the general area where you live... meaning you can go back to your own bed each night. No she can not receive a per diem while she is filming at home. And when they are filming out of town, TLC/ Figure 8 are picking up all the expenses. At one time I read that TLC was paying the Gosselin's for the use of thier house during filming (don't know if it was true, but it is reasonable). Now that could be considered rental income (100% taxable) or it could have been additional 1099-misc income (again 100% taxable) or it could have just been extra income added to their pay.
No matter how much she gets the IRS will find out, remember 2 of DWTS who owed back taxes, I believe it was Shannon and Pam, as soon as they were bounced off here came Uncle Sam
I stand corrected on the college fund issue.
But, I think Jake might be gay, so good luck to KKate on that relationship going anywhere.
Jody and Kevin also collected 3.500.00 for doing the babysitting episode on J and K, I believe it was the kids day and they were compensated that money to film at their house. I beleive her BFF Jamie Cole will be on a few eps and her kids as well and get paid for that too. Thats why we are seeing so much of this woman now..TLC will probably add her as a Jon replacement, watch and see = )
If the Orphanage is in fact a film studio or a "set", then TLC and Kate can't maintain that the kids are not working in it.Should be interesting to see how they get around all these complications for tax purposes.
Does anybody know whether the Gosselin home is zoned to be a film studio? The last I read about this was that the land is zoned "Agricultural".Could they be infringing a zoning by-law?
The property is zoned agricultural. But it is also registered with PA Clean & Green (act 319). It would be interesting to know which class it is. Agricultural Reserve allows others to enter your property. The land was signed up for C&G in 1998 by the previous owners.
Since technically agriculture is a business, then they might not be violating the zoning. When they were at the old house... they were in violation of zoning laws. It was residential there.
C&G rules:
http://www.co.berks.pa.us/berks/cwp/view.asp?a=1176&q=455479
According to some multi-lists before the house was sold, the property was zoned residential.
http://reading.pennsylvania.remax.com/Listings/PrintableFlyer_r4.ASPX?LID=33374171
Businesses are to file a 1099 to anyone they pay $600 or more to -- I am sure that Kate, et al have received many 1099's and to ignore them would not be wise. The IRS has been doing more audits and getting tougher on taxpayers since the government is 'poor' and revenues are down. It's a way to get more income. If Kate and/or TLC is 'cheating', the IRS will catch up eventually -- I believe they can go back at least 7 years when doing an audit...
Kelly said:
Kate hasn't had the baloney pony in nearly two years and Jake ain't givin his up. They're ideal for each other.
~~~~
Your BEST witticism to date!!! LMAOROL, touche!
She's only allowed to deduct on her taxes that portion of the house that is used for business purposes, which by all accounts, hasn't been used on any filming, other than the dance studio and the kitchen. She's also able to deduct part of her utility bill that is used to heat/cool that portion of the house she uses but the home office deduction is a big red flag for the IRS and most people tend to avoid this deduction altogether.
Admin. said..."The point of this post is really to dispel this notion that the children are not paying for Kate's hair because it's a "gift" from TLC. No it's not it's INCOME the kids earned".
Admin,
Is it possible that the various gifts from TLC to Kate and the family are being written off as 'business expenses'? ie: hair, home remodeling and improvements (because the house is the set), travel, clothing, etc.
If TLC is gifting it to them, they can't write it off. You write off things you pay for yourself. If Kate is paying for it herself, some things MAY be able to be written off.
And NO her hair CANNOT BE WRITTEN OFF how many times does this have to be said? Read the tax code.
Be careful writing off the business portion of her home....you MAY NOT use it for any other purpose. You can't even go into the room to scrapbook if you're writing it off as a business room. I know since I write off a home office.
Admin, ignore my post above - I posted too quickly as you answered my question further down the comments.
"When they were at the old house... they were in violation of zoning laws. It was residential there."
They were not in violation of zoning laws in E-Town. I live a hop, skip and a jump away. It is zoned residential, but because it technically wasn't a "business" and they lived there (hence, residents) they got around it by claiming the use as home occupation. This meant that an art studio, barber shop, beauty shop, office, educational instruction (such as tutoring) and so forth were permitted, but no kennel, animal hospital, funeral parlor, retail store or restaurant weren't. This was a gray area, since nothing like this had ever happened in the neighborhood and since technically it was claimed to be a documentary and not a commercial business, there were no laws written as such for it. Word on the streets was that it wouldn't have been much longer, however, before hearings would have taken place on this issue.
In "home occupation," no more than 25 percent of the inside living area can be used for the business, and since they were filming all over the inside of the house (and outside), this most likely would have been investigated. Likewise, in "home occupation," residential zoning, no business activities can take place between 9 p.m. and 7 a.m. If they filmed before and after this, it would have been a violation. They left before any of this was investigated.
I guess the zoning board was breathing a sigh of relief.
Kelly said...
If it gets them both camera time and tabloid articles written about them, Jake and Kate will go to the ends of the earth to stay in the limelight. The two of them are cut from the same cloth.
~~~
Another good point Kelly. Got me to thinking. I'm wondering if, after Jake learned a bit about Kate on DWTS, perhaps he even went to her and asked her the best way to 'make it' in the reality business. She of course told him, "be controversial", basically, be an a$$. If you've read any of the latest on Jake/Vienna, you'll notice, that is exactly what is happening. Both of them (Jake and Vienna) are 'prostituting' themselves out, for any show that comes acalling. That's what his goal has been since trying to get on The Bachelor, to be a 'star'. What is it w/this reality crap (Balloon Dad?) that people will make total fools, jerks of themselves, just to be on TV? Money, really?
"The bottom line? Kate's freebies are in fact income in exchange for working for TLC, and not freebies at all. She must pay taxes on them."
Not if she gets a per diem (or corporate card) and the amount of that per diem doesn't exceed the federal level. If the gift (or freebie) doesn't come directly from TLC, but through a per diem or credit card and she uses the cash to purchase whatever, according to the IRS it is not earned income and is not taxable. But most (not all) CPAs and employers require receipts and a total accounting of what was spent and where.
Admin,
I never claim a home office deduction on my taxes, even though I have one and don't have another office to go to since my employer is based out of South Carolina. The deduction is minimal at best and I don't like bearded guys with flag colored suits showing up on my doorstep asking for documentation.
The Jake debacle is just another attempt for ABC to create controversy. I think that ABC has taken a page from TLC's book on how to create ratings and controversy with polarizing people who have no talent, just to generate ratings.
After all, with the economy in the shambles it is in and the Network News departments having to lay off hundreds due to declining revenues, this is the only alternative for generating money.
Yes, Kate does draw ratings because she is such an unlikeable person that people look to see what she's going to do next that is so off the charts. Jake and Vienna's so called split is contrived and scripted as well. After all, Jake has just been given a gig with a new ABC show in August.
These two will be used by the networks as often as possible so long as the networks can squeeze the last bit of public interest out of them to make the stock holders happy. Once they can't get top dollar from advertisers, they will drop the two of them like a sailor does a hooker, once he's been satisfied.
Moon and Mango, NO. Per diem is WHEN YOU ARE AWAY FROM HOME, typically traveling. TLC can't just give Kate a credit card, put a sticker on it that says "per diem" and tell her to spend, spend, spend, and try to say it's all tax free.
You might as well just send them all straight to jail.
I may not deduct my home office but dayum, I can deduct my boat payment. Oh those second homes.
Well, I just went to Preesi's site, and I guess I was the only one in the dark...looks like this has already been discussed....
http://www.metrowny.com/blogs/archives/813-Jake-Pavelka-and-Kate-Gosselin-dating.html
Fidosmommy, Oprah did NOT pay the taxes on the Pontiac's that she gave away. It's all in the new bio on her written by Kitty Kelley (which has documentation like crazy to prove it). A fascinating read.
Carolina Gal,
Oh they WILL go out on a few dates. I'd lay odds and pay off in spades if they don't but there's one caveat.........It's all for show.
Jake throwing Vienna under the bus for an opportunity to date Kate in the real world would be like me wanting to woo and win over the heart of Wilford Brimley.
Kate and Jake may go out on a few dates as long as their are cameras there to document it. Other than that, Me thinks that Jake plays on a different team and Kate well, she just ain't a team player.
Thanks for the laugh, Kelly.
You're right. Kate is NOT a team=player.
There are no coincidences in the Gosselin world. They foreshadow EVERYTHING they do and always have. There's always been a brief mention in advance about what they're going to do next, be it the trip to Hawaii, the new house, the dogs, DWTS, etc. It doesn't surprise me one bit that just after Kate is filmed saying she's lonely and a tabloid runs a cover story about Kate needing a man, voila - along comes suddenly single Jake and the rumors about the two of them. I would bet this whole thing's been scripted for months.
I just read this and it's perfect!
http://www.usatoday.com/news/opinion/forum/2010-06-26-levey25_ST_N.htm
"would be like me wanting to woo and win over the heart of Wilford Brimley."
I thought he died. Or was that Will Geer? No matter...I couldn't see you with either of them!
Kelly,
Nobody is gonna drop Kate anytime soon. She is easy money and the networks count on gals just like yourself to stay interested in everything she does!
TLC loves you honey!
It's all scripted. Trust me on that. There is nothing Kate, Jon, Jake, Vienna or any so called reality show subjects do that isn't.
Kate and Jake being an item would be as boring as watching Jersey Shore. Just a bunch of pigs looking for a stye and a few bones thrown their way. Nothing else matters to any of these no talent wannabes.
Hasn't this reality tv thing run its course?
"Moon and Mango, NO. Per diem is WHEN YOU ARE AWAY FROM HOME, typically traveling."
And Kate never travels? LOL! I never implied that she make purchases only while at home. She recently drove to Wayne, 60 miles away. Is it not possible that TLC paid her a per diem to be used for gas, food, and lodging if her trip had so required it? In this case, those things would have been free for her, and she would not paid income tax on the cash paid to her.
A trip to Whole Foods to buy food for the family is a business trip??? Try getting that one past the IRS!
Then again, she's made an empire out of the kids, maybe the IRS will let her pass her children off as a business.
Hi May,
Glad you responded and as incorrect as you are regarding easy money and what the networks count on, both you and the networks gauged my interest and my gender so totally of the mark, I don't know what to believe with regards to networks or newspaper reports.
An example, yesterday in an AP report, there was a headline that stated: "New Study of Obesity Looks for Larger Test Group". (Weren't they fat enough?) Yet again, another Headline on ABC NEWS "War dims hope for Peace" (Ya Think)?
So, I don't tend to believe the networks and the networks know nothing about me. I'm a male, not a female. I'm 100 percent practicing heterosexual and my interest in Kate, Jake or any of the others they try to pawn off on us as being the most reality of reality is nothing more than a slap in our face for figuring, like you did about my gender and my interest.
Wrong again but nice try.
"A trip to Whole Foods to buy food for the family is a business trip??? Try getting that one past the IRS!"
Certainly, if it was a photo-op for TLC, or if TLC did filming there for an episode!!
Moon reasonable CPAs can disagree. I would probably air on the more conservative side if I were a CPA. But I think it's really stretching it to try to get away with this trip as a business trip and I'd advise my client don't go there.
Pushing the envelope is what gets people like Kate audited or worse.
"Just a bunch of pigs looking for a stye and a few bones thrown their way."
They're looking for an eye infection? I think you mean sty! LOL!
"But I think it's really stretching it to try to get away with this trip as a business trip and I'd advise my client don't go there."
I disagree. IF this were a trip with the sole purpose of filming, it was a business trip. IF it were a trip for publicity purposes, it was a business trip. She and the CPA would argue that there is no way anyone would make a 120-mile round trip journey just to buy food for the family when there's a Giant in her back yard.
Interesting debate Moon and Admin. So even if TLC pays her gas, I can't imagine that shed be entitled to free groceries or that she can claim them. If they are filming her reality which includes grocery shopping, shed be paying for her own groceries and they would not be tax deductible... Not sure how it would work...
She is shopping for food for her children--it is not a deduction.
If Kate is trying to get away with such a ridiculous deduction....that's wrong. She's robbing Americans. That's money she owes the government.
I hope her CPA has ethics and is telling her to pay Uncle Sam what she owes instead of manipulating and schooling the system. Every dollar she doesn't pay is taken from everybody else.
"Interesting debate Moon and Admin. So even if TLC pays her gas, I can't imagine that shed be entitled to free groceries or that she can claim them."
Right. She wouldn't be entitled to free groceries, but if she were traveling there specifically TO BE FILMED or for a photo shoot, and it was requested by TLC that she do so, and if she were paid a per diem, then the gas and any meal she bought for herself would be paid for by the money provided to her by TLC. She wouldn't be schooling the system.
Of course if it were only a trip to buy food for her family, it goes without saying that she wouldn't be entitled to a deduction or any free gas or meals!
"She is shopping for food for her children--it is not a deduction."
I agree with this. See above. It wouldn't be a deduction if that were the sole purpose of her trip, but to say that if TLC asks her to travel there for a photo shoot or filming and it wouldn't be deductible because she happens to pick up food in the process is as erroneous as saying that none of the expenses on a TLC-filmed trip to Disney (gas, food, lodging) is deductible because she happenes to buy souvenirs (out of pocket) along the way.
MSN is recyling an old video of Billy Bush interviewing Kate during DWTS,posting it with the question "Is Kate making millions?" I guess this is to remind the sheeple that poor Kate needs to work to feed her kids. In this video Kate agrees with Billy that she sold her kids privacy for a paycheque, insisting that she and Jon just didn't earn enough to feed the kids, and that when they realized what they had done, they figured it best to keep going and receiving the pay cheque as that was the positive out of all those pesky negatives. She then stresses that she set up a college fund but doesn't have near enough in it to send 8 kids and this coupled with her mounting legal debt means she has to work. Billy keeps insisting she is rolling in the dough and could retire from tv. Then Kate reveals lie number 34968 when she says the TLC film crew loves her kid so much they have been visiting the home all along since production stopped. Now wasn't the theme of her new special about how this whole year went by with the kids desperately missing their beloved crew and Kate opens the door and gives them the surprise of their lives by bringing the crew back? I also noticed she prefaced her answers with"Honestly" which is a great indication of just how dishonest she is, and knows it.
To Moon & Mango and Admin - I don't care if TLC is paying her perdiem, or if either of the 2 parties is trying to sneak it past the IRS.
TLC is paying her in some fashion, she may even be contracted to be "out in public" a certain number of days a week (why pay for INF photogs if she isn't in view of the camera??). I don't care if they are paying her in this fashion, as long as the kiddos are not in the photos, let the shutters continue clicking.
Whole Foods may have gifted Kate with a large selection of products in exchange for her mentioning their name on camera, displaying their logo on the bags in the back of the SUV. (there were a lot of bags, but nothing looked "family size") And LOVE IT that someone loading the SUV said "she comes here all the time!" Right.
Ms. Admin,
Are the gift suite items etc. Celebs receive at
events,such as the fugly (IMO) boots seen on Kate
reportable income? Are Celebs issued a 1099 at the event?
Thank you,
Vicki
Enough of the taxes. Let's get back to the lesbian shorts-sharing.
That woman has made plenty of money from television to put half of PAs kids through college so don't give me that she is broke and still needs to work, i say she is lying whenever her botox lips are moving
Are the gift suite items etc. Celebs receive at
events,such as the fugly (IMO) boots seen on Kate
reportable income? Are Celebs issued a 1099 at the event?
According to the IRS the celebrity gift bags are indeed 1099'able. In fact, I seem to remember there was a big hoopla about this since many of those that were gifting failed to give out 1099's and were later penalized by the IRS and the celebs were saying "it's not fair that we have to 'claim' these gifts"...
This is what the IRS says: "These gift bags are not gifts for federal income tax purposes because the organizations and merchants who participate in giving the gifts bags do not do so solely out of affection, respect, or similar impulses for the recipients of the gift bags." http://www.irs.gov/newsroom/article/0,,id=161153,00.html
The problem is you cannot just call anything a gift when the giver has a motive to give it to you--in the case of gift bags, it's free publicity and attaching yourself to a celeb name.
"Whole Foods may have gifted Kate with a large selection of products in exchange for her mentioning their name on camera, displaying their logo on the bags in the back of the SUV"
That's the problem Koop the IRS says it's NOT a gift if you do it in exchange for something. If Whole Foods gave her a bunch of groceries without any strings attached, they can probably sneak it by as a gift. But if at any time they mention it is in exchange for free publicity, it's not a gift, it's payment and INCOME.
I think what gets people in trouble with the IRS is not paying close attention to how the IRS defines things and believing that if they think in their heart something is a gift, or a deduction, or what have you, it is. The IRS have very detailed and clear explanations. I think every "gift" Kate has ever gotten is suspect for the IRS if the company donating it has some kind of motive, usually advertising. She may very well have paid massive taxes on many of them at the advice of a CPA. And audits are confidential so she may have been audited we don't know.
Lawsuits are made over people trying to bicker with the IRS over this stuff and get away with it. I say just follow their rules in the first place.
"And LOVE IT that someone loading the SUV said "she comes here all the time!" Right."
Wasn't it reported that she got lost and had to ask someone for directions? There goes that "she comes her all the time" fib.
I would imagine that with a clever CPA and a sharp tax attorney, you could find loopholes in anything and a myriad of ways to get around how things are reported. It all comes down to whether the IRS gets really tough and the time comes when the piper has to be paid.
Do you suppose that when Kate was talking about her "mounting legal debt" maybe she meant that she had to pay her tax accountant and attorney? We have assumed that it was about the divorce, but that's over and done with. The tax stuff would be ongoing and I expect very complicated, especially if she's fighting the IRS for every possible deduction.
That's possible. I wouldn't even breathe without having a CPA on my red phone if I had the kind of tax complexities Kate did. She probably also has to pay throughout the year not just at tax time.
My taxes are complicated enough since I have a small business....a growing one yea!
Friendly reminder, Rule number 2: No refusing to let things go!
Just wanted to say this blog is so refreshing, thank you for it. :)
There are no coincidences in the Gosselin world. They foreshadow EVERYTHING they do and always have. There's always been a brief mention in advance about what they're going to do next, be it the trip to Hawaii, the new house, the dogs, DWTS, etc. It doesn't surprise me one bit that just after Kate is filmed saying she's lonely and a tabloid runs a cover story about Kate needing a man, voila - along comes suddenly single Jake and the rumors about the two of them. I would bet this whole thing's been scripted for months.
I just read this and it's perfect!
http://www.usatoday.com/news/opinion/forum/2010-06-26-levey25_ST_N.htm
Fidosmommy, Oprah did NOT pay the taxes on the Pontiac's that she gave away. It's all in the new bio on her written by Kitty Kelley (which has documentation like crazy to prove it). A fascinating read.
Admin,
I never claim a home office deduction on my taxes, even though I have one and don't have another office to go to since my employer is based out of South Carolina. The deduction is minimal at best and I don't like bearded guys with flag colored suits showing up on my doorstep asking for documentation.
The Jake debacle is just another attempt for ABC to create controversy. I think that ABC has taken a page from TLC's book on how to create ratings and controversy with polarizing people who have no talent, just to generate ratings.
After all, with the economy in the shambles it is in and the Network News departments having to lay off hundreds due to declining revenues, this is the only alternative for generating money.
Yes, Kate does draw ratings because she is such an unlikeable person that people look to see what she's going to do next that is so off the charts. Jake and Vienna's so called split is contrived and scripted as well. After all, Jake has just been given a gig with a new ABC show in August.
These two will be used by the networks as often as possible so long as the networks can squeeze the last bit of public interest out of them to make the stock holders happy. Once they can't get top dollar from advertisers, they will drop the two of them like a sailor does a hooker, once he's been satisfied.
Moon and Mango, NO. Per diem is WHEN YOU ARE AWAY FROM HOME, typically traveling. TLC can't just give Kate a credit card, put a sticker on it that says "per diem" and tell her to spend, spend, spend, and try to say it's all tax free.
You might as well just send them all straight to jail.
She's only allowed to deduct on her taxes that portion of the house that is used for business purposes, which by all accounts, hasn't been used on any filming, other than the dance studio and the kitchen. She's also able to deduct part of her utility bill that is used to heat/cool that portion of the house she uses but the home office deduction is a big red flag for the IRS and most people tend to avoid this deduction altogether.
Lily said...
Complexity, the IRS doesn't look at the grey areas, they look at the black and white. This is what the tax code say PERIOD! Truse me, I work for the Government.
---
I'm supposed to take your word because you work for the government? Sorry, but unless you're an accountant or work for the IRS (just because you work for the government doesn't mean you know anything about tax law) I have no reason to value your word over anyone else's.
As for the IRS not working in gray areas...does the term "loop hole" ring a bell? Tax law is hardly black and white.
ANYONE can report potential tax fraud on Jon and Khatezilla Go$$elin. I did it on someone and they got audited (money under the table for their nanny). Call ANY IRS tax fraud number and REPORT these two jerks NOW.
Moom and Mango what you've said about per diem is true, however, in the military, government, etc. you don't get per diem while at your home "duty station". Her home would be her "duty station" so no per diem.
That is the whole point it's complicated. I cannot possibly explain all the nuances of the tax code here. I've explained a few general misunderstood rules. But if Kate tries to get all these expenses past uncle sam expect an audit!
One question, what if the freebies are given from different businesses? For example, GE gives a washer and dryer, a toy store gives the electic riding cars, a nursery the plants for landscaping, etc. If they are not directly from TLC but come from individuals (I'm sure at TLC's request as they will be given free advertisement when mentioned on the show) and don't exceed the maximum for a nontaxed gift then they wouldn't have to be claimed as taxable income? A person can receive a gift of money up to something like $10,000,00 per year from someone without claiming it as taxable income so could that person also receive multiple material gifts or money from multiple sources and still not have to claim it because it isn't coming from just one individual? Hope I explained this clear enough.
I think what started people thinking there was monkey business going on was the "cash only" requests.
Guess what Jon and Kate? Just because it's cash only don't mean it's not TAXABLE It's just easy to get away with cheating the government that way, just like you cheated little old church ladies out of it in the first place.
Just to be clear, JMHO, a lot of business expenses ARE tax deductible. I'm guessing your hubby is paying for hotels, meals, conference fees, etc. for his employees which are all fully or in part tax deductible.
But this is why someone like Kate should have a good CPA because it starts to get complicated. Not everything you ever spend money on the IRS will count as a business expense....in fact a limo ride to the airport just to maintain your image so you don't pull up in a crappy toyota, they specifically say is NOT a business expense. Neither is hair, makeup and clothes. Try to claim them and expect Uncle Sam to come a-knockin.
Wait, Kate's freebies aren't free? Waaaaaaaahhhh!!! It's just her alone with eight kids and THAT'S NOT FAIR!!! (roll eyes)
mama mia said...
In Maddy's book... "Surprise, our Christianity was just for the cameras... Our Mother hated being with us.... Our parents marriage was just for the cameras.... Our parents didn't bother raising us...."After my mother went to jail for tax evasion our lives changed.....
You didn't complete your sentence. You should have ended it "for the better".
I love this because I think the "free" stuff very much outweighs the real $ earned. So, if they have to pay tax on the "things/stuff" they have to dip into their vaults to pay for it. It's not like you have deductions taken off each paycheck and then there' no big surprise/tax bill at the end of the year. She gets these things throughout the year/years (kitchen, trips, vehicles, clothing, mini cadillacs...) and when it's all calculated as INCOME she will owe!!
I am clergy in a "Mainline" denomination, so I have a different situation than many. I am an employee of the Church and yet I am self employed through that same job. My taxes reflect both.
Because I have income from my job, I file a 1040 just like everyone else. Because I live in a church parsonage free of charge, I must also pay self employment tax on the fair rental value of the house PLUS my income and the utilities allowance I get every month.
Every time I perform a wedding, a funeral, give a speech or other service and receive an honorarium (even in cash, which is frequent) I must report that as extra income. I have to be sure to write it down so I don't forget I got that money.
The ONLY money that crosses my palm that I do not have to report to the IRS is my business
mileage. That is between the church and me, and I must keep accurate and timely records of the business miles I put on my car if I want to be reimbursed. I usually do not turn in mileage, but the IRS is unconcerned about that.
The only clothing I can deduct is my pulpit robe, since it cannot be considered "street clothing" by any reasonable assessment.
My point is that some of us have more complicated income, but the IRS knows about all of it. They have provided ways for us to pay what we legitimately owe. To even think of
skirting the responsibility to pay every cent of our legal taxes is beyond my understanding.
The Gosselins have complicated income, what with the "love offerings" and the perks. I trust they have professional help to figure it out. They do not want to call attention to themselves, because the IRS doesn't kid around.
Hopefully she isn't listening to the sheeple who are telling her all this stuff is just a freebie gifty!!!
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