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Automotive Programs for Students in Palm Beach County

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Automotive Programs for Students

Palm Beach County is helping to prepare students for a career in the automotive industry with vocational programs that highlight an industry need. Quality automotive technicians in a growing industry is evident, and Palm Beach County schools are addressing the issue with automotive programs that tackle ever-evolving technologies.

Automotive Technicians

In 2016, 17.5 million new cars were sold in the United States. Americans now drive more than 260 million vehicles.  There is, however, a crisis in the auto industry – a severe shortage of skilled technicians to service them.

“This is a significant problem not only for the auto industry but for owners who need dependable service from trained technicians,” says Oren Tasini, one of the foremost authorities in the United States on automotive law and issues.

Palm Beach County Business Development

Tasini, a shareholder with the North Palm Beach law firm of Haile Shaw & Pfaffenberger, P.A., recently joined Palm Beach County School Superintendent Dr. Robert Avossa, and members of the Business Development Board of Palm Beach County, to discuss how area schools could help prepare students for a career in a field in which learning about new technologies never stops.

Avossa said one the main challenges is convincing students and their parents that the automotive service industry is a viable option for students who wish to have a successful career.

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Employment in Automotive Industry

Last month, in a New York Times report about the shortage of automotive technicians, The Times noted that, ” top-level technicians in the field can earn $100,000 a year after achieving master mechanic status and five years of experience. . .According to a 2016 report by the National Automobile Dealers Association, 266,000 technicians are employed to perform mechanical and body repairs.”

Automotive Industry Growth Rate

 The shortage of dealer technicians is estimated to be more than 25,000. The problem has become so acute that BMW and Fiat have started their own training programs.  The Bureau of Labor Statistics projects that employment in the automotive repair sector will increase nine percent from 2012 to 2022.

Automotive Service Industry

Even with this kind of projected industry growth, parents are still concerned about their children’s long-term job prospects. Avossa, Tasini and top leaders in the automotive service industry hope to allay parent fears and provide high quality training for students that would include computer, communication, written, mechanical and electronic skills.

automotive technician program

Automotive Education Programs

“We have an opportunity here to provide students with the training they need to be successful in the automotive industry, at a time when trained technicians are especially needed,” says Tasini. “Quality vocational programs are essential to ensure America’s workforce is equipped with the skills necessary for a successful future – and Palm Beach County is planning on leading the charge.”

The roundtable event was organized by Linda Barnette of MD Johnson, Inc., in conjunction with Kelly Smallridge, President and CEO of the Business Development Board of Palm Beach County. The BDB’s leadership is a vital part of this effort to increase jobs in Palm Beach County.

 

How to Maintain Your Company’s Reputation

company's reputation

Recently, the importance of a company’s reputation has become increasingly apparent, as companies such as PepsiCo and United Airlines have had to cultivate their responses to crises in order to maintain or in their case, build up their reputations after taking a huge hit. Hopefully, your business or corporation never has to deal with any PR crisis, but it’s always smart to be prepared. Let’s discuss how your business can maintain a positive reputation from the very beginning and avoid corporate crisis management.

Importance of Business Reputation

Whether you own a small business of just five employees or a fortune 500 company, maintaining a solid reputation is vital to its success. Reputation after all, is a combination of what your business does and what people say about you. Here’s how you can help people see your business in the best light possible.

company's reputation

Company Ethics

Make sure your company has strong ethics. Is your company trustworthy and does it keep its promises? Also known as business ethics, it is a form of applied ethics or professional ethics that examines ethical principles and moral that arise in a business environment. It is relevant to the conduct of the entire organization as well as each individual.

Reliable Company

Be a business that people can rely on. What is a reliable business? If you say you always offer free shipping, always offer free shipping. Be a company that stands behind its products and services and that provides consistent service. If a customer reaches out to your company via social media – respond through social media. Not only does that seem like that is what they are comfortable with but it will also show other customers that you are invested in quality customer support. A reliable company continually builds a positive relationship with its customers and maintaining the company’s reputation.

Community Investment

Make sure to invest in your community. It’s 2017, if a company seems like it lacks social responsibility, that company usually doesn’t last very long. People like seeing businesses that support good causes and a great community investment plan can positively impact your company’s reputation. It doesn’t have to be political but invest in your community and the community will invest in you.

Employees

Be a company that is structurally strong. Is your business well managed by high-quality people? You want to be the company that its employees are consistently talking highly of. Making sure you represent your company in a reasonable and approachable way is also beneficial to not only customers but also future employees.

Business Growth

Make sure your business’s financial performance is continuously growing. This is pretty much the ROI of the above steps. If your business has a record of profitability then people will feel more confident in investing in you. When your business offers high quality products and services, your company is innovative and your employees are happy and knowledgeable, the customer service will be excellent and so will your company’s reputation.

Corporate Crisis Management

If you find your business’s reputation under attack and it’s because of something you’ve done the best thing to do is apologize when you screw up. Apologies can’t be rushed, hurried or awkwardly handled.

North Palm Beach Corporate and Business Law

A carefully planned legal strategy is a hallmark of risk and reputation management and an important element of any business or corporate entity. Our North Palm Beach law firm provides skilled legal advice in all aspects of Corporate and Business law. We take the time to learn about your business in order to provide efficient, results-oriented legal services specifically tailored to your company’s specific needs. If you’re in need of legal services for your business, contact us for a corporate attorney immediately. We’re hear to assist you and your company’s reputation.

Give us a call today. 561.627.8100

Sources: http://www.instituteforpr.org/reputation/
http://www.cimaglobal.com/Documents/Thought_leadership_docs/2010-06-11-cid_exrep_corporate_reputation_june07.pdf

Understanding the Differences of C Corporations and S Corporations

corporations

Looking to Start a Corporation?

Corporations differ from other forms of businesses in the sense that they are independent legal entities that are separate from the people who own, control and manage them. Due to this recognition as an individual entity, they are viewed as a legal “person” in the view of tax laws, and can thus be engaged in business and contracts, can initiate lawsuits and itself be sued. They also must pay taxes.

How are Corporations Taxed?

The C and the S refer to IRS Code Sections. C corps feature a double taxation – one tax at the company level and another tax on profits distributed to shareholders. This double tax is why many people consider S corps, which has only one level of tax. But there are restrictions on ownership of S corps, where as there are no such limits on C corps. There are a variety of tax, operational and financing considerations when determining which type of corporation or other entity to form to best suit your business needs.

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C Corporations

A C corporation is a business term that is used to distinguish this type of entity from others, as its profits are taxed separately from its owners under sub chapter C of the Internal Revenue Code. It’s the most common type of corporation in the U.S., as they offer unlimited growth potential through the sale of stocks, there is no limit to the number of shareholders a c corp can have, there are certain tax advantages, and limited liability, meaning they cannot be sued individually for corporate wrongdoings. Keep in mind that c corps comes with double taxation by the IRS, as revenue is taxed at the company level and again as shareholder dividends. This type of corporation is good for businesses that sell products, has employees and a storefront.

S Corporations 

S corporations start out as C corporations but make a special tax election to have income, deductions, etc. taxed directly to shareholders. S corporations are “pass-through” entities for the purpose of taxation, meaning that the business isn’t taxed but profits or losses pass through to the shareholders to include on individual tax returns. That is significant if the business isn’t making a lot of money or incurs a loss because individuals may take that loss against other income on their tax returns. S corporations are limited to 100 or fewer shareholders, but about 97 percent of S corporations have three or fewer shareholders. Also keep in mind that s corps cannot be owned by a c corp, other s corps, LLCs, partnerships, or many trusts.

Of course, we at Haile Shaw & Pfaffenberger believe that consulting with a lawyer is the safest bet when forming a corporation. A carefully planned legal strategy is an important element of any business or corporate entity. Our Corporate & Business law team provides skilled legal advice in all aspects of Corporate and Business law including entity structuring, the sale and purchase of businesses, asset leasing, advice on shareholder and partner concerns, legal audits, e-commerce and more.

Ready to form a corporation or other business entity?

We’ll help you get started.

Give us a call at 561-627-8100.


Source: http://www.businessdictionary.com/article/37/what-is-a-c-corporation/

Why is a Legal Will Important [Is it Necessary?]

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legal will
Do I need a will if I have beneficiaries?

Why you need a legal will [What happens without one]

Recently, The New York Times published an article about the lack of Americans who have drawn up a legal will. A recent study conducted by Caring.com found that fewer than half of American adults (42 percent) have a legal will and the most common reasoning for it is, “I just haven’t gotten around to it.”

The survey also found that:

  • One in five millennials, adults 18 to 36, have a legal will
  • 81 percent of people 72 and older have a legal will
  • 36 percent of adults with minor children have a legal will

If you find yourself making excuses for why you haven’t gotten around to writing up a will yourself, here are a few reasons why you might want to set some time aside to create one.

Wills to Protect Assets

Having a will is vital in making sure that your money and belongings go to who you wish after you die. So what happens if you don’t have a will? It’s up to the courts to decide.

In Florida, the intestacy statute (“intestate” meaning – dying without a will) dictates how a person’s assets are distributed through probate. When a person in Florida dies without a will, the statute mandates:

  • The surviving spouse receives the entire estate when the decendent has no descendants.
  • The surviving spouse receives one half of the estate when there are living descendants of the decedent; the other half is distributed among the decedent’s surviving descendants.
  • The surviving descendants receive the entire estate of an individual who was not married at the time of death.
  • When a decedent has no surviving spouse or descendants, the entire estate is left to the decedent’s parents. If there are no surviving parents, the estate passes to all surviving siblings.
  • The estate of decedents with no surviving spouses, descendants, parents or siblings, will be distributed among relatives.
  • The estate will escheat (be passed) to the State of Florida for any person with no surviving heirs. Properties are sold and the proceeds are deposited into the State School Fund. There is a 10-year statute of limitations for an individual to make a claim of entitlement.

The cost of that bond is usually about $100 per year for every $100,000 in the estate, is paid by the estate’s assets.

What Happens When a Beneficiary Dies?

When someone dies without appointing an executor through a will, the court appoints an administrator to disburse all property that wasn’t jointly owned with a survivor. The administrator then posts a bond to ensure that he does not loot the estate and vanish. The cost of that bond is usually about $100 per year for every $100,000 in the estate, is paid by the estate’s assets.

Wills to Protect Assets
Advising Fiduciaries and Beneficiaries

If you are in a domestic partnership, generally, if you die without a will and are survived by that partner, they inherit the same as a surviving spouse. In Broward County Florida, the law extends benefits to domestic partners and provides a domestic partner registry. The city of West Palm Beach extends benefits to domestic partners.

Do I Need a Will if I Have No Assets?

What if you don’t have any assets? We would still advise a legal will. If you die at the hands of someone else, your estate might have a wrongful death suit that produces millions of dollars in costs, all of which will be divvied up by the state if there’s no will instead of being distributed to whomever you choose in the amount and manner that you choose.


 To find out where you should keep your legal will depending on what option you choose, read the rest of The New York Times article here.

Of course, we at Haile Shaw & Pfaffenberger believe that consulting with a lawyer is the safest bet when drawing up a will. Our Estate planning law team including wills and trusts helps protect your assets and works to ensure the proper distribution of those assets.

Give us a call today 561-627-8100.

 

Madoff Trustee Overstepped Authority, Properly Reined in by Court

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In the February 13 Palm Beach edition of the Daily Business Review, Haile Shaw & Pfaffenberger attorney, Oren Tasini, wrote about a controversial legal case involving the liquidation of Bernie Madoff’s brokerage firm.

Sometimes in the midst of a controversial legal case, there is a risk that important legal principles get cast aside. As attorneys, it is our ethical duty to not let that happen. We must advance all plausible legal theories on behalf of our clients within the bounds of the law.

Case in point – the liquidation of Bernie Madoff’s brokerage firm. In an overzealous effort to recover money for the brokerage firm’s customers, Irving H. Picard, trustee for the liquidation of the estate of Bernard L. Madoff Investment Securities, LLC (BLMIS), attempted to reach beyond his statutory authority to seek the repayment of money from customers of BLMIS.

My partner Gary Woodfield and I represent a number of former customers of BLMIS,  many of who  were long-time customers and investors with Madoff and his brokerage firm BLMIS, with some dating as far back as 40 years ago. When first starting out in the business, Madoff acted as a sole proprietorship, before forming a legal entity, BLMIS, in 2001. In assessing the legal actions of the trustee against our clients seeking to recover money they allegedly received from both Madoff and/or BLMIS, it became clear that the trustee was exceeding his statutory authority and seeking relief from the bankruptcy court that was not within the power of the court to grant (i.e. the court lacked subject matter jurisdiction over the trustee’s claims).

The foundation of our argument stemmed from the fundamental constitutional principle that federal courts are ones of limited jurisdiction. They may only hear cases conferred upon them by Article III, Section 2 of the U. S. Constitution which limits an Article III court’s subject matter jurisdiction to cases arising under the U. S. Constitution or the federal laws of the United States (as well as treaties to which the United States is a party).

In the BLMIS liquidation, the powers accorded the Trustee and the bankruptcy court’s jurisdiction, stem from the provisions of the Securities Investment Protection Act (SIPA) of 1970. Liquidations of failed brokerage firms have unique aspects under SIPA; however, in essence they are conducted like proceedings under Chapter 11 of the Bankruptcy Code. In seeking to defend the trustee’s actions to recover money invested by our clients, we challenged the trustee’s actions to invalidate transactions occurring prior to 2001 that involved Madoff individually, as opposed to those involving his limited liability company, BLMIS, formed in 2001. We argued that under the provisions of SIPA, the actions by the trustee relating to transactions prior to 2001, conducted by and between Madoff individually and his customers, were not within the purview of SIPA, nor within the subject matter jurisdiction of the bankruptcy court overseeing the BLMIS liquidation. Therefore, the court’s subject matter jurisdiction only extended to those transactions occurring after 2001 and effected by BLMIS.

In a well-reasoned decision, United States Bankruptcy Judge Stuart Bernstein of the Southern District of New York, ruled, in a 62-page decision that Picard could not recover the alleged improper transfers made before 2001, because those transfers exceeded the jurisdictional authority of the court. Lacking subject matter jurisdiction, the court dismissed these claims with prejudice.

Some may question Judge Bernstein’s decision. The insolvency of BLMIS resulted in the loss by many customers of sizable sums of money. The ability of some customers to receive recompense, or to retain money they may have received, which the trustee is now seeking to recover (having an apt nomenclature of  a “clawback” action) is dependent in part on the total amount of money available. This recent decision will reduce the potential size of that pool.

However, such a concern is outweighed by the importance of preserving fundamental rights granted to each of us under the Constitution. The constitutional rights of Madoff customers to have the trustee’s “clawback” claims heard only by a court having the power to do so and only pursuant to a law granting the trustee the power to assert such claims must be respected and honored. Such a right is no less important than the right of a criminal defendant who claims a violation of the right to be free from an unreasonable search and seizure, or a property owner who claims their property was taken by the government without just compensation. In such matters, we do not weigh the importance of one right against the other. They must all be protected and preserved, lest none be.

We are a country where the rule of law applies. As attorneys, we are integral to preserving that principle. We advocate for our clients in a zealous fashion consistent with our ethical duty and the opposing party does the same. We rely on judges, within the strictures of the Constitution, to resolve competing arguments. In the Madoff case, while many may consider the recent decision questionable, the outcome is consistent and in harmony with our legal system. For our democracy to work, it must work for all regardless of who they are and even if the outcome is one that is not palatable to some.

Picard has recovered more than $11 billion for customers who have sought compensation for their alleged losses. However, in this case, Judge Bernstein correctly prevented Picard from reaching beyond his legal authority and recognized the limits of the court’s own power as well.

Oren Tasini is a shareholder with the law firm of Haile Shaw & Pfaffenberger in North Palm Beach.  He is one of the foremost authorities in Automotive Law in the United States and works with automotive dealerships regarding legal compliance, regulatory and franchise matters, and in the purchase and sale of automotive franchises. He also assists corporate clients in a variety of legal issues in connection with the formation, growth, operation and sale of business enterprises. Contact Oren at otasini@haileshaw.com.

 

Future of Valuation Discounts under Internal Revenue Code Section 2704

Matthew N. Turko - estate planning attorney

Matthew N. Turko, a Wills, Trusts & Estates attorney with Haile Shaw & Pfaffenberger wrote an article for the Palm Beach Daily News’ annual Estate Planning Guide published on January 8. If you missed it, here is the story below. If you have any questions, call us at 561.627.8100.

 


 

Future of Valuation Discounts under Internal Revenue Code Section 2704

By Matthew N. Turko

The Internal Revenue Service published its much anticipated Proposed Regulations on IRC Section 2704 on August 4, 2016. These Proposed Regulations may be final before the end of 2016 and effective in early 2017 before or shortly after this article is published. The Proposed Regulations are broad and substantially change the landscape for valuation discount planning.

Estate planners utilize valuation discounts in conjunction with estate planning techniques in an effort to depress the value of interests in entities for transfer tax purposes. For example, a client wishes to make a gift of an interest in an LLC that owns underlying assets valued at $10 million to an irrevocable trust for the benefit of the client’s family. Based on various restrictions included in the LLC operating agreement, the client obtained an appraisal of the LLC interest that allows a 20% discount for lack of marketability of the LLC interest. Coupled with a 20% discount and a $5 million gift tax exemption available, the client is able to gift up to a 60% interest in the LLC appraised at $5 million without incurring any gift tax. The gift receives an immediate $1 million boost in the irrevocable trust’s pro rata share of the LLC’s underlying asset value -i.e., 60% of $10 million.

The Proposed Regulations eliminate valuation discounts in the context of family-controlled entities. The Proposed Regulations clarify that Section 2704 covers not only corporations and partnerships but also limited liability companies and any other entity or arrangement that is a business entity. Furthermore, the Proposed Regulations clarify the definition of control of an LLC or any other entity -not a corporation or partnership – constitutes owning 50% of the equity in such entity or owning any equity interest with the ability to cause the liquidation of the entity.

Importantly, the Proposed Regulations close a loophole in Section 2704(b). Under Section 2704(b), “applicable restrictions” are disregarded for valuation purposes.  Applicable restrictions are any restriction limiting the ability of an entity to liquidate and either the restriction lapses after the transfer or the transferor or any member of the transferor’s family -i.e., spouse, ancestor, lineal descendant, sibling or spouse of any of aforementioned – has the right after a transfer to remove such restriction. However, Section 2704(b) carved out an exception to applicable restrictions for restrictions that are no more restrictive than state law. As a result, many states modified their entity legislation after Section 2704(b) was enacted to provide for default rules that mirrored various restrictions commonly included in partnership and operating agreements. This allowed such restrictions to be no more restrictive than state law and allowed discount planning to continue despite Section 2704(b). The Proposed Regulations address this exception to provide that only mandatory restrictions imposed by state law will be considered no more restrictive than state law.  Therefore, the default rules provided in state entity statutes will no longer insulate various restrictions – e.g., unanimous consent to liquidate a limited partnership – from being considered applicable restrictions and these restrictions will no longer be considered for valuation purposes.

Additionally, the Proposed Regulations create a new class of disregarded restrictions if such restrictions either lapse after a transfer or can be removed by the transferor or his or her family.  Disregarded restrictions include the following:

  • limits on the ability of the holder of the interest to liquidate it,
  • limits on the liquidation proceeds to an amount that is less than minimum value – that is, the pro rata share of the assets of the entity -,
  • deferring the payment of liquidation proceeds for more than 6 months and
  • payment of liquidation proceeds in any manner other than in cash or other property, other than certain notes. These restrictions are disregarded for valuation purposes.

Even if a non-family member has the power to remove a disregarded restriction, such restriction will still be disregarded for valuation purposes unless the non-family member’s interest has been held for more than 3 years, constitutes at least 10% of the value of all equity, and at least 20% of the equity is owned by non-family members.

If the Proposed Regulations are finalized, valuation discount planning will be over for family-controlled entities.

It would be in a client’s best interests to complete transactions relying on valuation discounts before the Proposed Regulations are finalized to potentially “lock in” discounts.

However, estate planning techniques that are the fundamental basis of the valuation discount planning – such as installment sales, gifting and GRATs – will still remain viable and continue to offer clients an opportunity to remove assets from their estate and allow the future appreciation from such assets to accrue free of federal estate, gift and GST taxes despite the absence of the boost of valuation discounts.

 

Nonprofit Educational Symposium Review

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Nonprofit Educational symposium
Nonprofit Educational Symposium

Priyam Kulkarni, TriNet HR; Andrew Gray, Daszkal Bolton; Muhammed Chaudhry, CEO, Silicon Valley Education Foundation, and April Marsland, TriNet HR

Phil DiComo, who serves as outside general counsel to nonprofit organizations and foundations, spoke to nonprofit industry executive directors and CEOs at the Ft. Lauderdale Chamber of Commerce Tuesday on the topic “Avoiding Laissez Faire Governance in Your Boardroom.” Although governance is a central responsibility of non-profit boards of directors, a recent study shows that many directors are not engaged or do not understand their obligations while at the same time many organizations lack fundamental governance structures and processes. In his presentation Phil set a framework for CEOs and executive directors to benchmark their own board governance and to work with directors towards their long-term organizational governance objectives.

Top 8 Fundraising Methods for a Nonprofit Organization

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No one said raising money for a nonprofit organization was easy but learning about the different methods of fundraising can make the challenge of raising money for your nonprofit a little easier. Keep in mind, that your organization doesn’t have to stick to just one method. Although we would warn against trying to use all the methods at once, for that is a recipe for trouble and can lead to events that are poorly planned and connections with donors that fall short. The best plan of action is for your nonprofit organization to carefully plan out multiple fundraising methods over multiple years, based on the nonprofit’s internal strengths. Here are the eight best nonprofit fundraising methods.


1. Attracting Individual Support and Donations

Typically, nonprofit organizations reach out to individual donors through direct mail appeals, newsletters, social networking, and special events.

2. Soliciting Gifts From Major Donors

The most common methods of attracting gifts from major donors include gala events, luxury auctions, planning special tours and trips.

3. Holding a Capital Campaign

This is typically a coordinated effort to raise a large sum of money for a particular project or goal.

4. Promoting Legacy Gifts or Planned Giving

Your nonprofit can encourage donors to leave gifts via their estate, typically through a will or trust by offering information (in publications, seminars, and personal meetings) about how these gifts will be put to meaningful purpose.

5. Raising Money From Business or Sales

This type of nonprofit fundraising can encompass anything from kids selling baked goods to museums having their own gift shop to organizations providing their own clients with job training.

6. Applying for Foundation Grants

The most valuable thing about grants is that they’re usually for a large sum of money– often for thousands of dollars. These grants allow a nonprofit organization to start working on a new project or hire more staff.

7. Applying for Government Grants

These grant amounts are typically very high, so high in fact that some nonprofits subsist almost entirely on government money.

8. Requesting Corporate Gifts

Local businesses often will contribute such goods as flowers, alcohol, food, jewelry, tickets for travel, services from a spa or salon, and so on. Businesses can also lend you needed equipment for an event, such as tablecloths and tableware.

To learn more about nonprofit fundraising methods, click here

EpiPen cost rises- What this means for Florida residents

EpiPen

EpiPen, the life-saving allergy product, is now a $1 billion a year business for Mylan, the drug company that is currently under fire for the startling surge in EpiPen pricing. In 2007, an EpiPen cost about $57, as of today the EpiPen costs over $600- although the injectable medicine costs less than $1 and has a shelf life of about 12 months.

If you’ve been stocking your home with EpiPens since around 2010, you would have noticed a change in your prescription. It was around that time that new guidelines from the FDA stated that patients who get the 0.3 mg dose of epinephrine in a single EpiPen should actually be prescribed two 0.3 mg doses.

People with costly health insurance pay about $30 for each EpiPen. Not everyone is as fortunate. Families with lower cost, high deductible plans are reportedly paying $150 to $400 for a single pack of EpiPen. And parents, who now see EpiPens as a necessity are fearing for their children’s lives when they can’t access the drug. Especially when the new normal established by public awareness campaigns is that people at risk for anaphylactic shock should have multiple EpiPens- at work, in the car, at home, at school, and on their person.

So what does this mean for those people at risk of an anaphylactic shock living in Florida?

In 2014, Governor Scott signed the Emergency Allergy Treatment Act (HB 1131) into law which helps to increase the availability of epinephrine auto-injectors. This law allows restaurants, theme parks, youth camps and sports leagues, and other businesses to have supplies of epinephrine auto-injectors. State Senator Aaron Bean of Jacksonville and State Representative Matt Hudson of Naples were the sponsors of this important legislation. This legislation not only offers protections for people who suffer from life-threatening allergies, but it also provides civil liability protections for health care providers, pharmacists and others who maintain and administer this emergency treatment.

In 2015, Mylan stated that in the state of Florida, 684 public, private and charter schools are participating in the EpiPen4Schools program. This program offers four free EpiPen or EpiPen Jr Auto-Injectors to qualifying schools. There are 12 schools participating in Palm Beach County (three in Boca Raton, five in North Palm Beach, and one each in Boynton Beach, Jupiter, Palm Beach Gardens and West Palm Beach).

Read more about the national controversy involving Mylan here

Victory tax and what that means for Olympians

2016 Rio Olympic Game Medals

Now that the 2016 Rio Summer Olympic Games are over, our winning Olympians might be surprised when they arrive back home in the United States. That’s because America’s Olympic medalists must pay state and federal taxes on the prize money they get for each win. This “victory tax” can be as high as 39.6% of their winnings and with the U.S. Olympic Committee awarding $25,000 for gold medals, $15,000 for silver, and $10,000 for bronze, it’s almost like the real winner here seems to be the IRS.

You must be thinking by this point, for someone who has carried the flag for his or her country, is this just?

Is this reasonable?

Poor Phelps.

The truth is, most U.S. Olympic medalists won’t actually pay taxes on the winnings.

Here’s why.

Because the athlete is in “the business” of being an athlete. The related business expenses such as travel, equipment, and coaches are all deductible on a federal income tax return. If the athlete reports winnings and other sports related income on a Schedule C, then he or she could claim related deductions on the Schedule C. If it’s a business, those deductions wouldn’t be limited by income.

Okay, so what if the athlete’s participation in his or her sport is a hobby – as opposed to a business – then winnings are reported as “other income” on a federal form 1040. Deductions are then still allowed against winnings but only if the taxpayer (Olympian in this scenario) itemizes those winnings. If the Olympian does itemize his or her winnings, then deductions are treated as “miscellaneous itemized deductions” on Schedule A and are limited to the total of deductions in excess of 2% of AGI, or Adjusted Gross Income. This also means that deductions cannot exceed the amount of winnings or income.

But honestly, what athlete became an Olympian medalist by treating their sport as a hobby?

You can read more about Olympians and taxes here