Saturday, February 28, 2009

TAX DEDUCTIONS FOR POST SECONDARY EDUCATION

I was wondering if you could get me some information. My son will be going to school this fall. Are here some credits that will give us a tax break for education?

Rene

Rene, President Bush was not called the "Education President" for nothing. Under his watch there were several tax insentives put in the books the help defray the cost of education. Unfortunately everybody in Congress jumped on the bandwagon so we have several laws that we can select from. This makes it a little confusing. In addition the the credits below there may be some deductions.

You are right in that education tax credits can help offset the costs of higher education for yourself or a dependent. The Hope Credit and the Lifetime Learning Credit are two education credits available which may benefit you. Because they are credits rather than deductions, you may be able to subtract them in full, dollar for dollar, from your federal income tax.

The Hope Credit
The credit applies for the first two years of post-secondary education, such as college or vocational school. It does not apply to the third, fourth, or higher years of undergraduate programs, to graduate programs, or to professional-level programs.



  • It can be worth up to $1,800 ($3,600 if a student in a Midwestern disaster area) per eligible student, per year.

  • You're allowed a credit of 100% of the first $1,200 ($2,400 if a student in a Midwestern disaster area) of qualified tuition and related fees paid during the tax year, plus 50% of the next $1,200 ($2,400 if a student in a Midwestern disaster area).

  • Each student must be enrolled at least half-time for at least one academic period which began during the year.

  • The student must be free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of the tax year.

The Lifetime Learning Credit
The credit applies to undergraduate, graduate and professional degree courses, including instruction to acquire or improve job skills, regardless of the number of years in the program.


  • If you qualify, your credit equals 20% (40% if a student in a Midwestern disaster area) of the first $10,000 of post-secondary tuition and fees you pay during the year, for a maximum credit of $2,000 ($4,000 if a student in a Midwestern disaster area) per tax return.

  • You cannot claim both the Hope and Lifetime Learning Credits for the same student in the same year. You also cannot claim either credit if you claim a tuition and fees deduction for the same student in the same year. To qualify for either credit, you must pay post-secondary tuition and certain related expenses for yourself, your spouse or your dependent. The credit may be claimed by the parent or the student, but not by both. Students who are claimed as a dependent cannot claim the credit.

These credits are phased out for Modified Adjusted Gross Income over $48,000 ($96,000 for married filing jointly) and eliminated completely for Modified Adjusted Gross Income of $58,000 or more ($116,000 for married filing jointly).

If the taxpayer is married, the credit may be claimed only on a joint return.

For more information, see Publication 970, Tax Benefits for Education, which can be obtained online at IRS.gov


LEARN MORE ABOUT THE CARD CHECK BILL ON A MARCH 4TH WEBCAST

As I have reported in prior blogs the so-called Employee Free Choice Act (EFCA) — also known as the "card check" bill — is federal legislation that would strip employees of their right to a secret ballot vote in union organizing elections. The bill would also give the federal government the power to set wages, benefits, and work rules, regardless of business size or type of industry. Here is another opportunity to learn more from an expert panel of labor lawyers, labor relations specialists and public relations professionals on how the card check legislation would negatively impact business and employees.

To participate in this Webcast, go to

http://www.infiniteconferencing.com/Events/mcafeetaft/register.php.

You may view the event live at 12 p.m. CT on Wednesday, March 4. Or you can view the recorded Webcast anytime after 3 p.m. CST March 4 simply by clicking on the link .

WARREN BUFFETT LETTER TO SHAREHOLDERS


If you want to get a very interesting view on not only the economy, but business practices you need to read Warren Buffett's letter to his shareholders. Unlike most CFO's he takes responsibility for errors in judgement. The report came out Saturday February 28, 2009. He reported that 2008 was the legendary investor's worst year ever. It also reported a grim fourth quarter, though it eked out a slight gain. (Berkshire's annual letter to shareholders.)

I think that Warren Buffett, called the Oracle of Omaha, is the only person the can write a report to the shareholders that is interesting to read. In one statement on a acquisition he quoted a country and western song lyric that went "I liked you better before I got to know you."

It is worth the time to read. Check it out.

Friday, February 27, 2009

CAN I PUT GOLD COINS IN MY IRA?

Because of the economic downturn over the last few months my IRA has taken a big hit. I was thinking about moving from mutual funds to gold coins. One of the guys at coffee said that IRAs could not be invested in gold coins. Is he correct?Justin

Justin, you aren't the only one that took a hit. Before I answer your question I want to make sure you realize that I am not a investment advisor. I am not making any type of judgement for or opposed to investing in gold. If I knew exactly how to invest I would not be sitting in my office but rather on the beach.

Okay, so much for the disclaimer.

It is possible for your IRA account to hold gold coins. Realize that you cannot actually hold them, they must be held by your IRA trustee. For example if you have $30,000 left in your IRA that is held by the Forth National Bank, the bank trust department that administers your IRA would have to purchase and keep the coins in the name of your IRA account. I presume that you could occasionally go to the bank and touch and fondle the coins but they could not be in your possession.

What is probably confusing the "expert" at the coffee shop (there seem to be a lot of experts at the coffee shop) is that the law states:

The acquisition of an IRA of any collectible is considered a distribution and therefore taxable. The law goes on to list precious metals as a collectible. But... to make things confusing the law later states that gold and silver coins are not considered collectibles. Go figure.

HEADS UP - IRS TO START INDEPENDENT CONTRACTOR EXAMS

The IRS just announced that they will start random exams of employment tax returns next year. The goal is to get a better idea of how much misclassification of workers and other employment tax errors contribute to the tax gap. The current estimate that payroll tax mistakes cost the Service $15 billion is more than 20 years old.

IRS is still in the early planning stages, so look for exams to start around April 2010.

EMPLOYEE FRAUD ON THE RISE

According to this ariticle in the Wall Street Journal fraud has increased because of the recession, and small businesses, which often lack internal controls, are particularly vulnerable. Experts say employees often are driven to steal cash or forge checks under pressure from family and friends to maintain their lifestyles or because they resent the owners. The Wall Street Journal

Listen to this... 100% of the clients that I work with that experienced embezzelment have said "I never expected that person to steal from me." 100%! Make sure that you have controls in place.

HERE IS WHERE THE $819 BILLION OF STIMULUS IS GOING

The WashingtonPost has great visuals of how the $819,000,000,000 where and when the stimulus money will be spent. Check it out.

http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html?referrer=emaillink

Thursday, February 26, 2009

HERE COME THE TAX INCREASES

Back in October, as it became clear that Barack Obama would win the election, we started planning how to help our clients plan for the tax increases. Since then, the economy has fallen completely off the cliff. Taxpayers across America stopped worrying about potential Obama tax hikes and started worrying they wouldn't have any income to be taxed.

Shortly after the election, Obama discussed deferring tax increases to avoid squeezing the economy.Then last week, President Obama signed an economic stimulus bill offering nearly $300 billion in tax breaks (see previous blog entries). For a while there, it looked like raising taxes on "the rich" was just a political practical joke. (Unless, of course, you think jokes should be funny.)

Now Obama has begun releasing more detailed budget proposals. And now we're starting to see plans for future tax hikes -- tax hikes that will be costly either directly or indirectly to many taxpayer.Specifically, Obama proposes to let the Bush tax cuts expire for households making over $250,000 (to start with.) Marginal rates would climb back up to 39.6%. Capital gains taxes would climb back to 20% or even 28%. And Obama would cap the value of itemized deductions at 28%, so that even taxpayers in higher brackets save no more than 28 cents tax for each dollar of deduction. According to Bloomberg News, this would mean an extra trillion in tax over the next 10 years.

These proposed increases won't take effect until 2011 but we wanted to you to hear it from us first. We will be keeping you informed. Planning is going to be very important this year.

DON'T THINK THAT YOUR SALON WON'T BE UNIONIZED

Recently I posted a article about the attempts by unions to have Congress pass what is known as the "card check" legislation. During his campaign President Obama pledged to support this legislation. At a recent State Chamber of Commerce meeting a committee member stated that unions were going to begin by targeting small service businesses. Besides hospitals, doctor offices and restaurants that would include us in the salon and spa industry.

Below is an editorial from the Washington Times backing up these claims.

If you would like more information on this subject let me know and I will pass on to you.

EDITORIAL: 'Yes, they do want to unionize your gas station'

(Washington Times) -- In a Feb. 12 editorial, U.S. Rep. Howard P. "Buck" McKeon (R-Cal.), the ranking minority member on the House Education and Labor Committee, writes that organized labor's top priority — replacing secret ballots with "card-checks" — would have "dire consequences" on America's small businesses. "Workers will lose their right to be heard, both on the question of whether to unionize and on the details of their first contract," McKeon writes. "Businesses will be unable to communicate with their own employees about what's best for their shared future."


He writes that some entrepreneurs and observers wrongly believe that firms with fewer than 100 employees are already or soon will be exempt -- and won't be affected by the "Card Check" bill.
"Under current law, card check could indeed be applied to the corner grocery store-and probably will," McKeon write. "The local deli with a few high-school students washing dishes and working the cash register after school? They're a target too." Small businesses are an obvious target for union organizing, he says.

"Small businesses are the largest source of new jobs in this country. With nearly 600,000 workers being hit with pink slips last month, crippling the small-business community with card check might just be the worst thing we could possibly do for job creation and retention. But that is exactly what Congress is poised to do."

Wednesday, February 25, 2009

QUESTION ON HOW DISCOUNTS AFFECT TAXES

I have a question:

I keep track of all the discounts I give customers for example: when I put a product on sale, birthday discounts, family discounts. etc. Can you write that off on your taxes?

Thanks,

janette


Janette, your question is one that I receive quite often. I have a lot of salon people that ask if the discounts can give them an additional tax deduction. The short answer to this question is “No.” You cannot actually deduct things twice.

Let me explain. For example, let’s assume that you have a product that you normally sell for $40. You put the product on sale and you sell it for $30. When you ring the product up and deposit the money, you deposit $30. This is what you pay tax on. Even though you were to sell it for $40, the actual amount you received was $30. Therefore, you already have reduced your income by the amount of the discount so there is no additional deduction.

I do feel that it is important to keep track of discounts. Knowing how many dollars you are discounting and if you have staff, knowing how much they are discounting (if they have the discretion to do so) can help you operate your business. Salons work on such a low profit margin to start with, that if we start offering to many discounts, it can really eat into the bottom line.

Please let me know if you have any other questions.

Friday, February 20, 2009

HOW DO YOU GET YOUR STIMULUS CREDIT

Larry, I here that I am supposed to get some money from the government because of the law that the president passed. How do I get my share?


Edeth

Edeth, don't get too excited. What you are talking about is what the government calls the "Making Work Pay Credit." I have detailed information on this in a previous posting.

If you are an employee you will see the credit in your paycheck. The IRS will issue revised tables for your employer very soon. The 12 months of the credit will be crammed into about nine months of paychecks. That’s about $10-$20 extra per week. WHOOPEE!

If your are self-employed to get any advance benefit from the credit you will have to reduce quarterly estimated payments.

Here is the rub. The exact amount of the payroll tax credit for the year will be calculated when you file your 2009 return. If your income (adjusted gross income to be exact) is over $75,000 for individuals or $150,000 for married you will have to pay the money back with your 2009 return.

MORE ON THE CARD CHECK BILL

A couple of days ago I discussed the so-called Employee Free Choice Act — also known as the "card check" bill — is federal legislation that would strip employees of their right to a secret ballot vote in union organizing elections. The bill would also give the federal government the power to set wages, benefits, and work rules for employers in a wide variety of industries throughout the economy.

To see an ad featuring former Democratic presidential nominee George McGovern, go to
http://www.youtube.com/watch?v=afjp4Cx-3W0.

To see an ad from the Coalition for a Democratic Workplace, go to
http://www.youtube.com/watch?v=N6yrZtq27e0.

Wednesday, February 18, 2009

FOLLOWUP QUESTIONS ON THE STIMULUS BILL

Congress has approved new economic stimulus legislation, the American Recovery and Reinvestment Act of 2009.

Here are a few that we have been getting on the legislation. For those of you that want more information the following is a link to the Senate Finance Committee 11 page summary of the income tax provisions. summary of the key provisions

Could the new legislation affect 2008 tax returns? Generally, no. The new legislation does not have any major impact for the vast majority of individuals preparing their 2008 tax returns due April 15. Instead, these changes will largely impact 2009 tax returns filed next year, in 2010. Taxpayers should continue to prepare their 2008 tax returns as they normally would.

There are a few limited areas in the legislation that could impact 2008 tax returns. For example, for some small businesses, changes in the net operating loss provisions could affect 2008 tax returns. More details on this and other changes — such as the first-time homebuyer’s credit — will be available soon.

When and how will people get the $400 to $800 “Making Work Pay” tax credit? Taxpayers will not get a separate, special check mailed to them like last year’s economic stimulus payment. For many taxpayers, the additional credit will automatically start showing up in their paychecks this spring. For people who receive a paycheck, the credit will typically be handled by their employers through automated withholding changes. For some other people, the credit can be claimed when they file their 2009 tax return next year.

More details about the “Making Work Pay” credit will be available soon, including an updated version of the withholding tables contained in Publication 15, (Circular E), Employer’s Tax Guide.

Does this new stimulus legislation have any impact on the recovery rebate credit for 2008 tax returns being filed now? No.

More information on the new law as it becomes available.

Larry Kopsa CPA

Tuesday, February 17, 2009

HERE IS HOW THE STIMULUS BILL WILL AFFECT YOUR TAXES

Unless you were competely out of the look you know that President Obama has just signed the "American Recovery & Reinvestment Act." While much of the news focuses on the spending provisions, it also includes $287 billion in tax cuts:

  • The act includes a new "Making Work Pay" credit for 2009-10 to offset the first $400 of Social Security tax you pay ($800 for joint filers). It phases out as your adjusted gross income (AGI) tops $75,000 ($150,000 joint).

  • There's a new higher education tax credit of up to $2,500 for your first $4,000 in college expenses. The credit phases out as your AGI tops $80,000 ($160,000 joint). You can also use Section 529 plan funds for computer-related expenses, including software and online access (2009-10 only).

  • Buying a car? You can deduct state and local sales and excise tax you pay on a new (but not used) car, light truck, RV, or motorcycle you buy between January 1 and November 30, 2009. The deduction is limited to purchase amounts up to $49,500 and phases out as your AGI tops $125,000 ($250,000 joint).

  • Buying a home? The act increases the "first-time homebuyer" credit from $7,500 to $8,000, extends the purchase period through November 30, 2009, and eliminates the requirement to repay the credit for homes purchased in 2009. This credit phases out as your AGI tops $75,000 ($150,000 joint).

  • Buying business equipment? The act extends the current $250,000 first-year expensing limit and 50% bonus depreciation provisions for purchases through 2009.

  • Finally, the bill "patches" the Alternative Minimum Tax, to protect 24 million mostly middle-income filers from the AMT's bite.

Congress passed these new rules with less deliberation than usual, so there's bound to be confusion. To learn more, call us at 402.362.6636.

Sunday, February 15, 2009

REPORT TO CONGRESS ON INDEPENDENT CONTRACTORS AND MISCLASSIFIED WORKERS

Below is the report to Congress on independent contractors. Nothing really new here, just more emphasis on cracking down on misclassified employees as independent contractors. Not only are we seeing the federal government looking at this issue, the states are starting to crack down. The problem with the states is they don't have to abide by the Section 530 relief.

Larry Kopsa CPA

Despite the past efforts of IRS and the agency's plans for the future, more work must still be done to address the misclassification of employees as independent contractors, the Treasury Inspector General for Tax Administration (TIGTA) said in a new audit. (Audit Report No. 2009-30-035) “The misclassification of employees as independent contractors is a nationwide issue affecting millions of workers that continues to grow and contribute to the tax gap,” TIGTA said.

As described in the audit, the tax gap is the difference between the amount of tax that taxpayers should pay and the amount that is paid voluntarily and on time. Based on '84 data, an estimated $1.6 billion in lost revenue per year can be attributed to worker misclassification, although a preliminary analysis of fiscal year 2006 data suggests the amount is now “markedly higher than the $1.6 billion,” TIGTA said.

Research conducted by IRS has found several reasons for employers misclassifying workers as independent contractors, including the following: they have a lack of knowledge or receive poor advice; they might have protection under
Code Sec. 530 and can legally treat workers as independent contractors who would otherwise be employees; or they deliberately misclassify workers to cut costs and to gain a greater competitive advantage. The audit report is located at http://treas.gov/tigta/auditreports/2009reports/200930035fr.pdf .

Friday, February 13, 2009

LABOR UNIONS AND THE SALON INDUSTRY

There is a movement right now in Washington to allow your employees to create a union without you even knowing it. Under current rules, if employees want to unionize they are required to tell you, and after both sides present their cases the employees have a secret ballot.

Under the proposed rules, the union organizers can talk to your employees without you knowing it. If enough employees sign the card, bingo, they are unionized. There is no secret ballot. The concern is that employees can be pressured into signing.

I am a board member of the State Chamber of Commerce. At a recent meeting a presentation was made by a representative with ties to Washington. The presentation stated that, if passed, the unions are planning to target hospitals, restaurants and the service industries. That means us.

Here is a link to an article from the Professional Beauty Association that sums this up. I advise you to read.

http://pbawashingtonupdate.blogspot.com/2009/02/labor-unions-and-salon-industry.html

BEAUTY INDUSTRY REPORT ADDRESS

In my February 9th entry I discussed an article I read in the Beauty Industry Report about efforts of manufactures to move sales from salons to stores. In the article I mentioned you could read the report and I gave you the website. As several of you pointed out, the web site was down. The good news is that it is back up again. Here is is again if you are interested. www.bironline.com

Wednesday, February 11, 2009

COMMENTARY: Ruin Your Health With the Stimulus Plan

On http://www.bloomberg.com/, former New York Lt. Gov. Betsy McCaughey, now a senior fellow at the Hudson Institute, writes that no one from either political party is objecting to the health provisions slipped in the federal economic stimulus bill (H.R. 1) without discussion. Senators and congressmen "should read these provisions and vote against them because they are dangerous to your health," McCaughey writes.

The bill’s health rules will affect “every individual in the United States” by creating a new bureaucracy, the National Coordinator of Health Information Technology, which will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective, according to McCaughey. The goal is to reduce costs and “guide” your doctor’s decisions. Hospitals and doctors that are not “meaningful users” of the new system will face penalties. “Meaningful user” isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose “more stringent measures of meaningful use over time.”

McCaughey writes that many of the health reform provisions in the stimulus bill come from former Sen. Tom Daschle’s book, which says that aging Americans should be more accepting of the conditions that come with age instead of treating them. "That means the elderly will bear the brunt," McCaughey writes. "Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost-effectiveness standard set by the Federal Council."

She adds: "The health-care industry is the largest employer in the U.S. It produces almost 17% of the nation’s GDP. Yet the bill treats health care the way European governments do: as a cost problem instead of a growth industry.
Imagine limiting growth and innovation in the electronics or auto industry during this downturn. This stimulus is dangerous to your health and the economy."

I CAN'T GET MY 1099'S

Larry, I am trying to file my tax return but I can’t get the information from my broker. He says I have to wait. I thought you said that the 1099’s have to be out by January 31st. What’s the deal?

Olivia

Olivia, I know that this is frustrating. We have several clients that are trying to get their returns done for school financial aid, or that have refunds coming that are in the same boat.

Here is the deal. Last year, Congress changed the due date from Jan. 31 to Feb. 15 for several forms: 1099-Bs, 1099-Ss and any 1099-MISC forms showing payments of lawyer fees or payments by brokers of substitute dividends or tax-exempt interest. The change also applies to brokers’ annual composite reporting statements sent to customers. This year, issuers get two extra days because Feb. 15 is a Sunday and the 16th is a holiday. Sorry, you just have to wait.

It is a pleasure serving you.

Larry Kopsa CPA

Monday, February 9, 2009

I DON'T KNOW WHAT I WOULD DO IF ONE OF MY SUPPLIERS WENT INTO COMPETITION WITH ME

To best serve you we know that we need to keep abreast of all that is going on in the industry. We read all of the magazines. I have found that one of the most informative publications is the Beauty Industry Report (BIR). In this month's issue I found the following information under ‘What’s New?’. Read and be scared.

The article is about the two giants, L’Oreal Paris & Proctor and Gamble. According to the article, they both plan on increasing their market share by mass selling hair care products to the average consumer through non salon/spa outlets.

L’Oreal’s
new EverPure, looking like a close relative of PureOlogy, will be flooding retailers later this month along with a flashy advertising campaign. Those of you that sell PureOlogy have already done the heavy lifting advising clients to use the brand. Now this.

As for Proctor & Gamble, they are positioning Pantene as an affordable alternative hair care product line. Here is the scary part… their marketing approach is to claim that in tests with comparisons to salon only products, approximately 70% of women who tested the Pantene products agree that it is better than the salon brands. How are you going to compete against that?

To read the whole article, I recommend going out to
www.bironline.com and get your subscription today. – Remember the subscription is tax deductible.

Saturday, February 7, 2009

IF YOU ARE ABOUT READY TO PURCHASE A PERSONAL RESIDENCE, YOU MIGHT WANT TO WAIT.

If you are about ready to purchase a personal residence you might want to wait. The current credit of $7,500 for first-time home buyers may be expanded to 10% of the purchase price, but no more than $15,000, and will not be limited to first-time buyers.

In addition, unlike the current credit, the new one would not have to be repaid over 15 years, although the House may insist on a phase out for higher-incomers.

The new credit would be fully refundable and would apply to residences bought within 12 months after Obama signs the bill. The current credit, along with the repayment obligation and phaseout for upper-incomers, would continue to apply until the bill is signed.

Tuesday, February 3, 2009

QUESTION ON W-9 FROM BOOTH RENTER

Larry, I saw your blog and was very appreciative of the information given, but I have an additional question.

I am a booth renter at a salon and want to know about the w-9 form. The salon owner is asking us to complete one and I don’t think I should have to. I strictly booth rent, I purchase my own products, come and go as I please, and set my own schedule.

I will time to time receive a check from the salon as payment, but the payment is not for a service. It's that my client wanted to use a credit card to pay me and it was run through the salon's credit card machine. So the check that I receive from the salon is my money that they processed for me.

My questions are:

· can the salon charge me more than the credit card fee set by the merchant?

· Do I have to complete the w-9 since I am not receiving payment from the salon for this service per say, they are only processing the payment?

· should I file a w-9 for the booth rent that I pay to them?

· If I do have to complete the w-9 it is only for $600 or more, correct? So if they process more than $600 in payments for me.

· Can the salon take the credit card processing fee from my tips?

· Independent contractor vs. independent business owner as a booth renter. I believe I am an independent business owner so the w-9 doesn’t apply.

Thank you so much for your time.

Franki

Franki, thank you for your kind comments. In response to your questions:

Since you are a booth renter it is acceptable for the owner to charge you more than the credit card cost. Remember that the owner has other costs involved with the credit card machine, such as the purchase or rental of the machine, and there is also additional bookkeeping involved with the handling of the credit card. My answer would be different if you were an employee.

I am not sure why the owner is asking for a W-9. At the same time, there is no reason not to complete one for them. The W-9 just stays in their file. If it were me, I would not make a big deal about it.

You should have a W-9 on file from the owner. In addition, unless the owner is a corporation, you should file a 1099 form showing the gross amount of rent paid. I am assuming that you have paid over $600. See my blog posting on the necessity of doing 1099s.

It sounds like you are somewhat confused. The W-9 is the form that tells you the owner's name and ID number. The 1099 is the form that you give to the owner with a copy going to the IRS showing the amount of rent paid. 1099’s are only required if you pay over $600 for business purposes during the year. You do not have to give a 1099 if the owner is a corporation.

Regarding the owner taking a service charge out of your credit card tips, since you are a booth renter, that is allowable. If you were an employee, it would not be allowable.

Finally, since you are a booth renter, you would not think that the W-9 would apply, but it is not really a big deal. I would not be opposed to giving them a W-9.

Don’t forget to do your 1099. The penalty is usually $100 for every 1099 not issued.

Let me know if I can do anything else to help.

Larry Kospa CPA

Monday, February 2, 2009

MORE ON BIG NUMBERS - YOU AND EACH MEMBER OF YOUR FAMILY NOW OWE $4,000.00

Recently I posted a ditty that I titled The Law of Big Numbers. See the January 28th posting. Here is more on that topic, which I find scary.

The Congressional Budget Office is forecasting a U.S. budget deficit for the 2009 fiscal year of nearly $1.2 trillion dollars. That's close to $4,000 for every man, woman, and child in the US.