EDJ Business Expense Plan is Under Fire

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Apr 6, 2006 7:40 pm

I have heard that IR’s are using this Business Expense Plan to run personal expenses through so as to lower their Gross Income so they can avoid the AMT.  I heard one Area Leader/Regional Leader tell one highly successful IR at the end of the year “to be creative” so that he could right off $30,000 in expenses.  I also heard an area leader say to another IR, “Go buy a bunch of postage.”  It seems as though EDJ has promoted a culture using this Business Expense Plan because they don’t pay for any expenses related to the practice.  Has anyone else heard any stories, like the ones above.

Apr 6, 2006 11:35 pm

I know someone was terminated for doing this.

Apr 7, 2006 9:46 am

That is my point.  I know people who have been terminated but I know several people who have been doing it but floating under the radar at Jones supervision.  It seems as though the NYSE is going to be investigating the whole program.  The IRS already did and that’s why Jones had to scale the program back so that IR’s could only put 10% of their net commissions because there was so much fraud going on by Jones IR’s

Apr 7, 2006 11:11 am

I heard that sally told jimmy the she like bobby, but bobby likes susie

Apr 10, 2006 5:34 pm

But Susie likes Sally, so as long as Bobby has a video camera everyone should be happy.

Apr 10, 2006 5:51 pm

[quote=FreedomLvr]But Susie likes Sally, so as long as Bobby has a video camera everyone should be happy. [/quote]

Dang your story is MUCH better then mine

Apr 10, 2006 9:29 pm

I know the IRS accepted this back in 1999 or so with Jones and you must use a predetermined amount.  And, you lose it if you don't lose it.  Not a bad way to go--but, I still got hit with AMT of several thousand per year.  Unavoidable I'm afraid.

Also, whatever you deduct post tax goes on for 2106 and subject to a 2% floor.  So, if my Jones income was 300k--My first 6k of deductions wouldn't even count! 

Nice that I don't have EITHER problem as indy and I make (and take home) more $ now than ever before.  Just the tax breaks alone are worth it to go indy.  Many reps overlook that, but it's icing on the cake.

Apr 12, 2006 7:01 pm

I am so glad you pointed out the restrictions in the EDJ Business Expense Plan.  Because all the IR’s (top-producing) were hitting the AMT, Edward Jones liberalized the plan (2005) so that the IR could take out 25% of their paycheck to pay for their own expenses. This amount was too liberal for the IRS and they told Jones they had to pull back on the percentage.  Jones pulled it back to 10% in December of 2005 for the 2006 calendar year.  All the top producing IR’s now will definitely be hitting the AMT in 2006.  It also encouraged a culture for the IR’s to “be creative” in their business expense plan.  It seems as though a lot of IR’s did a whole lot of advertising!  I’m so glad I’m indy now!  It’s not what you make it’s what you take home after taxes and expenses.

Apr 20, 2006 1:50 am

I can’t believe Jones is allowing this abuse to go on right under their nose.  Jeremy Michaelman in Compliance has to investigate more of these rogue brokers.