President, Dan Coons, opened the Zoom meeting platform early - as has been the Mesa West custom during the COVID pandemic. Members who chose to arrive early had the opportunity to enjoy some informal conversation.Allan Cady was attending from their boat in its slip at the dock in San Diego. He said the water was very calm and the expected high for the day was predicted to be 81°. Warren again showed of the fact that he was enjoying a homemade cookie - oatmeal/raisin this week. Visiting Rotarian Tom Yuzer had a beautiful virtual background photo of Prague, in the Czech Republic. He said that Prague and Budapest are his favorite cities in Europe and are very much part of his heritage.
Many Mesa West members will remember Judge Tommy Webb who spoke at the Mesa West meeting March 8, 2018. He was a Korean War orphan who was adopted by an American family when he was about seven years old, and ended up as a successful magistrate judge in Kansas.
Allan Cady reported that Judge Tommy and his wife spend half the year at the Kokopah RV resort in Yuma. Most Sundays he preaches to their congregation there. Service on Sundays starts at 9:00 AM. Allan and Polly were planning to stay there on their way home from San Diego, and have requested Tommy sing a favorite gospel hymn at the service that Sunday. In addition to being an inspirational and compelling speaker, Allan says Judge Tommy has a good singing voice as well. Others on the call early felt it would be great to have another program featuring Judge Tommy Webb since he would not have to leave Yuma to present at one of our upcoming Zoom meetings.
At Noon, President Dan Coons introduced himself and called the meeting to order. He reminded everyone that Rotary Opens Opportunities reciting the 2020-21 Rotary International President's theme. He also repeated the Rotary Vision Statement:
Together we see a world where people unite and
take action to create lasting change -
across the globe, in our communities and in ourselves.
Rotary Minute - Jeanie Morgan
Jeanie shared some information about the four areas of Rotary-Related financial support that are an integral part of the Mesa West Rotary Club culture:
- The Rotary Foundation - Annual Fund - Rotarians world-wide are strongly encouraged to give $100 every year to be "sustaining members." A common Rotary acronym is EREY - Every Rotarian Every Year relating to this expectation. When Jeanie joined Rotary in 1994, that was the expectation then, as well. Inflation has caused the value of that amount to be considerably smaller today. Rotarians who can afford to do so are encouraged to donate $1,000 each year and be recognized as Paul Harris Society members. Some of the funds donated by Rotarians in our district to the Annual Fund this year will come back to our district in three years to be used for district grants. Mesa West has taken advantage of the District Grant opportunity to fund local service projects. The funds not shared to the districts are used to support global grants on the seven Areas of Focus of The Rotary Foundation, Disaster Relief, Peace Scholars, etc. Donations to the annual fund and transferred recognition points qualify for Paul Harris recognition in $1,000 increments up to $10,000. $10,000 in actual donations qualify for recognition levels ranging from Major Donor at $10,000 up to Arch Klumph Society Platinum Foundation Circle with donations of $10,000,000 and more. Monthly-automated Rotary-Direct giving is the ideal way to give to this fund.
- The Rotary Foundation - Polio Fund - Encouragement for Rotarians to donate to this fund will remain strong until Polio is eradicated from our planet. Pakistan and Afghanistan remain on the list of endemic countries. Africa was declared polio-free last year after going three years with no reported cases of the wild polio virus. Donations to this fund also qualify for Paul Harris Fellow recognition. The Bill and Melinda Gates foundation has again committed to match $2 for each $1 donated by Rotarians. Last year our District 5495 leadership implemented an incentive recognition which the Rotary Club of Mesa West won and is the proud first and only custodian of the traveling trophy which will be given each year for the club doing the best job of supporting the Polio Fund. Members of Mesa West are encouraged to donate a minimum of $100 each year to this fund. Monthly-automated Rotary-Direct giving is the ideal way to give to this fund.
- Mesa West Rotary Foundation - This is the fund-raising and funding arm of Mesa West Rotary Club. Mesa West Rotarians are strongly encouraged to donate a minimum of $100 each year with more being strongly encouraged. Our club is currently in the midst of a Sponsorship campaign with a goal of raising $30,000 for our Foundation. Our foundation is recognized by the IRS as a 501(c)(3) charity. Each member should also make a personal commitment to find some external donors who will gladly donate to support the projects Mesa West is directly involved with in our community and the world. Jeanie is glad to invoice members or external contacts for donations. Send Jeanie an e-mail with the donor's name and a valid e-mail address. Donations will go to "undesignated" unless a specific area of service is communicated.
- The Rotary Vocational Fund of Arizona (TRVFA) - Mesa West Rotarians are encouraged to donate at least $100 to this fund which was incorporated in Arizona thirty years ago to support vocational education grants for individuals who meet low-income guidelines. The grants enable the recipients to lift themselves out of poverty. TRVFA is a qualifying charitable organization for the Arizona Tax Credit. In most cases, giving to this fund will not cost anything in the long run for donations of up to $400 for individual Arizona income tax filers or $800 for married couples filing jointly. Jeanie said, "if you can help someone lift themselves out of poverty and it doesn't cost you anything in the long run, why not do it. There is a way on the TRVFA online donation page to authorize monthly, quarterly, or annually recurring donations. Qualifying tax credit donations given by April 15 can qualify for the Arizona Tax Credit for the 2020 or 2021 tax year (but not both.)
Jeanie ended by saying that donations equal service in a tangible, measurable, transferrable form.
After Jeanie finished her prepared remarks, John Pennypacker added that giving to TRVFA is not limited to Rotarians. He urged members to advocate for giving to TRVFA with their friends, family and business associates.
Invocation - Pam Cohen
For the Invocation, Pam chose to share excerpts from words spoken by Barak Obama at the National Prayer Breakfast in Washington, D.C., February 4, 2016.
"God has not given us a spirit of fear, but of power and of love and of a sound mind. I pray that by His grace, we all find the courage to set such examples in our own lives - not just during this wonderful gathering and fellowship, not just in the public piety that we profess, but in those smaller moments when it's difficult, when we're challenged, when we're angry, when we're confronted with someone who doesn't agree with us, when no one is watching. I pray that our differences ultimately are bridged; that the God that is in each of us comes together, and we don't divide.
I pray that our leaders will always act with humility and generosity. I pray that my failings are forgiven. I pray that we will uphold our obligation to be good stewards of God's creation - this beautiful planet. I pray that we will see every single child as our own, each worthy of our love and of our compassion. And I pray we answer Scripture's call to lift up the vulnerable, and to stand up for justice, and ensure that every human being lives in dignity.
That's my prayer for this meeting, and for this country, in the years to come.
May God bless you, and may He continue to bless this country that we love.
Happy Bucks - Bert Millett
- Allan Cady pledged $10. He was happy to be on the call with so many good Rotarians from Mesa West.
- John Pennypacker pledged $10 to the Mesa West Rotary Foundation. John said he had shared a link with Shelly Romine to a site which could help her get volunteers signed up to work service projects quite easily with no cost.
- Ray Smith pledged $10 sad dollars for the pain of leaving his wife to sit with Wendell and happy because he was hoping to get some good income tax advice during Jim Schmidt's presentation later in the meeting.
- Pam Cohen pledged $5. She was very happy to see Dick Myren was attending the meeting even though she couldn"t actually see Dick.
- Lola McClane pledged $10 "just because."
- Warren Williamson pledged $10. He was happy to have survived what seemed like two hours in a dentist's chair.
- Tom Yuzer was happy to report he is making a home purchase in Mesa.
- Jim Schmidt pledged $100 to the Guaymas project. He was honored by all the positive attention resulting from the announcement of his retirement.
- Chuck Flint pledged $5. He had been to State Farm stadium to get his COVID immunization.
- Wendell Jones pledged $10 - sad to be putting up with Ray, but grateful to Jim Schmidt for his program later in the meeting.
- Jeanie Morgan pledged $10. She also went to State Farm Stadium to get her first COVID immunization. She had one up on Chuck because her son drove her there and treated her to dinner at Cracker Barrell where she enjoyed some catfish, green beans, and cornbread all cooked the right way. She said her son said, "I never dreamed I would be driving my mom to the west side to get a needle in her arm."
Announcements
- The Mesa West Rotary team - including recruited friends and family - had a record breaking year of collecting money for the Mesa Salvation Army. We collected $20,384.42 staffing the Bass Pro Red Kettle station.
- Allan Cady reported that sponsor program donations are very nearly at $9,000, which is nearly 1/3 of our $30,000 goal. "Unrestricted" is a good way to give, as there is no limit on how unrestricted funds are used.
- Shelly Romine announced the January service project. Saturday, January 30 from 8:00 AM to Noon, interested volunteers should sign up to work at the St. Vincent de Paul Community Garden. She said it was fun the last time and is sure it will be fun again. She also said that there are lots of tasks at the garden that do not require a green thumb.
- Shelly said details will follow about a service project being planned for February with packing food for United Food Bank
Program - Jim SchmidtMesa West Rotarian Jim Schmidt was well prepared to present a program about recent tax law changes and tax planning opportunities. To download his slide presentation, CLICK HERE.
He began by talking about the Coronavirus Aid, Relief, and Economic Security (CARES) Act which gave most Americans a stimulus check in 2020 for $1,200 ($2,400 for couples filing jointly), plus $500 more for each child under age 17. The payments were phased out for joint filers with adjusted gross income over $150,000, head-of-household filers with AGI over $112,500 and single filers with AGI above $75,000. It will be treated as an advance payment on a special 2020 credit.
In the CARES act, there was a huge benefit which fixed the 2017 TCJA glitch. Improvements or renovations to an existing building (interior and non-structureal) are 15-year property and eligible for 100% bonus depreciation (39-year depreciation to immediate write-off). This is not applicable to enlargements, elevators and escalators, internal structural framework or residential property.
Effective Jan1, 2018, the 100% bonus is available through December 31, 2022.
There were major changes to retirement plans. The beginning age for mandatory minimum distributions was increased from 70½ to 72. Contributions to traditional IRA's can now be made after age 70½. Fellowships and grad student stipends are treated as compensation for IRA purposes.
Withdrawal rules were tightened for inherited IRA's. Surviving spouses can still take it over their remaining life expectancies. The 10% early withdrawal (pre age 59½) penalty is waived for up to 100K of COVID related payouts, with a three-year spread and optional repayment.
Jim said there were no AGI limitation for cash contributions in 2020 and 2021. Nonitemizers filing a single return can deduct up to $300 ($600 for married filing jointly) for cash charitable contributions through 2021.
Mortgage insurance premiums being treated like mortgage interest on a qualified residence will continue through 2021.
The current lifetime estate and gift tax exemption of 11.7 Million per individual and 23.4 Million per couple with 40% estate tax rate beyond may go away as Biden has proposed restoring the 2009 levels of 3.5 Million, 1 Million gift, and 45% estate tax rate.
Jim said 529 plans can now pay for fees, books, supplies and up to 10K can be used to pay off student debt.
Over-the counter medications and menstrual care products can be purchased using HSA and FSA funds.
The cap on business losses of 500,000 on joint returns or 250,000 for single was suspended.
The Consolidated Appropriates Act of 2021 extended many of the CARES Act provisions through 2021. The discharge of personal residence forgiveness as a nontaxable income was extended until December 31, 2025.
The 100% of adjusted Gross Income limitation for cash contributions to public charities is extended through December 31, 2021.
The limitation of charitable contributions by corporations to 10% was increased to 25% by the CARES Act through 2020. The CAA act continues that through 2021.
The 10% floor on medical deductions set to take effect in 2021 will permanently remain at 7.5%.
The provision allowing employers to pay for employee's student loans up to $5,250 per year with such amounts being excluded from the employee's taxable income has been extended to December 31, 2025.
Educator expenses - the $250 above-the-line deduction for unreimbursed teacher expenses is expanded to include PPE expenses (masks, disinfectant and other supplies to prevent the spread of COVID-19.
Individuals can roll over unused benefits in their FSA and Dependent Care accounts from 2020 59 2021 and 2021 to 2022.
PPP Loans when forgiven remain nontaxable. Congress specifically overrode the IRS position that expenses attributable to the forgiveness were not deductible. As such, expenses utilized to qualify for forgiveness will now be deductible. The act also authorized additional permissible nonpayroll costs to qualify for forgiveness, including costs related to personal protective equipment.
There will be a new round of PPP-2 loans. Businesses may be eligible even if they received a PPP loan in the first round.
A stipulation to help restaurants waives the usual $50 limitation on business meals has been suspended from January 1, 2021 until December 31, 2022 allowing a 100% deduction if the food and beverages are provided by a restaurant.
In Arizona, Proposition 208 is being challenged in court. The proposition would create an additional 3.5% tax on income over $250K single and 500K MFJ. The Department of Revenue wants to quash the challenge and begin collecting the tax.
Biden Tax Proposals
- Don's expect changes right away - too many other important matters.
- He won't get everything he asks for
He wants to
- Tax the wealthy more heavily and have a higher minimum tax rate.
- Limit the benefit of itemized deductions to 28% for upper-income individuals
- Reinstate pre-TCJA rule and cap on itemized deductions for state and local taxes.
- Impose higher maximum rate on long-term capital gains
- Impose higher social security taxes for upper-income individuals
- Eliminate the basis step-p for inherited assets
- Eliminate real estate tax breaks
- Increase child and dependent-care credits
- Allow new credits for homebuyers and renters
- Reinstate of expand tax incentives intended to reduce carbon emissions
- Restore credits for buying electric vehicles
- Eliminate federal income tax deductions for oil and gas drilling costs and depletion
- Increase corporate tax rate to 28T
Tax planning tips
- Use the 0% capital gains tax rate if your taxable income is less than $40,00 single or $78,750 MFJ
- Take advantage of 100% bonus depreciation for 5, 7, and 15-year and QIP property, maximize new vehicle deductions, improve existing commercial real estate, and get a cost segregation study on a new building.
- Use the liberal repair and expensing provisions still in place on business and rental properties.
- Plan for higher taxes
- Review your estate planning and update your wills and trusts