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Posted on Friday, May 29, 2020
The people who have filed and paid too much tax again this year, as they did last year, almost always make themselves a promise that they “will do better from now on.”  They will keep better records; maintain a mileage log.  They will learn more about work options and increase their 401(k) or 403(b).  They will start a hobby job, or purchase a rental property and on and on.  Then Summer comes and it all fades into the background as the beach, golf course or woods call to them.  Family starts getting together, concerts are abound and all of a sudden it’s Fall.  Then work picks up and kids are back to school or off to an out of state...

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Posted on Friday, May 22, 2020
That’s what you often hear from a sneaker manufacturer or a car company to create a feeling of scarcity for a product in order to drive desire or cost up.  This is not a typical tactic of the IRS.  COVID-19 and the reaction to it has created a path of human misery, but like cutting up broccoli and stirring it into your kids’ mac and cheese, there are some hidden benefits for a few people unlucky enough to have had the virus, but fortunate enough to have recovered.  One such benefit is the ability to take up to $100,000 from a 401(k) or other retirement account without penality and without full taxation in one year, as would normally be the...

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Posted on Friday, May 15, 2020
Think again.  Of course, human life is more important, especially when it’s yours!  That being said, many of us have a worry list that is growing and if taxes were on that list, they have been pushed down by all the new concerns.  There is a growing divide in the U.S. between the people who have been able to keep working and those who have free fallen through the abyss of instant lack of income.  Those who own companies and those who work for them.  Taxes in most cases for those poor souls that stopped working are not a concern normally, other than having proper withholding, so even less now.  For those who kept working however, spending is often down...

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Posted on Friday, May 08, 2020
Many self-employed and small business owners who did not get applications in before the money ran out the first time around, are now getting them in during this second round of PPP funding, and the frantic level of requests seen previously seem to be a bit more orderly now.  Many people we have spoken to say that they are still working in some limited capacity, or had savings and so are getting by and have avoided taking PPP funds, as they don’t feel “as affected”, although they don’t know what will happen in the future.  That’s the rub.  What if they don’t take the funds today, since they are above water, but the funds again run out, and in August...

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Posted on Friday, May 01, 2020
It’s hard to be logical all the time about everything.  The most financially successful tax clients we serve at least attempt to force themselves to be logical, for their own benefit.  For instance, our parents, as well as a subset of the economy including some popular radio show based advisors like Dave Ramsey, say you should pay off your home and have a “free and clear” deed as a goal (they are wrong in most cases by the way).  That kind of thinking is emotional thinking, mixed perhaps with some presumptive attitude about what the general populous is capable of.  “Well, we know we can’t get people to do what would really be best for them based on pure math...

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Posted on Friday, April 24, 2020
The tax planning world has been evolving very quickly in the last few months.  Needless to say, anyone who felt they had a handle on being proactive is now working with at least one hand behind their back (maybe even two).  Accountants that are proactive (a small subset of the overall group) have been very actively communicating with clients who own businesses; self-employed, independent contractors, partnerships and formal corporations.  The non-planners have been taking phone calls, the planners have been making phone calls.  Later, when the PPP and SBA applications are finished, those same proactive accountants will start working with charitable clients around the new rules that allow for up to 100% of AGI to be taken as deductions.  Then,...

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Posted on Friday, April 17, 2020
With the “world on fire” it’s hard to care about the crisis coming in 2023 or 2024, but especially for retirees or soon to retire folks, next to sheltering in place, it’s the most important thing you can do!   Whether you think the stock market will have a V shaped recovery, a W shaped recovery or even an L shaped recovery, the message for everyone should be to focus on the fact that history repeats itself.  As far back as World War I, to fund the war needs of the country, the income tax rate jumped from 15% in 1916 to 67% in 1917.  A 450% INCREASE IN ONE YEAR!  Many other times in history, following black swan events, the...

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Posted on Friday, April 03, 2020
These are trying times and we all have information overload, but one small piece of the new emergency tax relief legislation that seems “lost in the sauce” is perhaps the most important for retirees.  There was a last minute push for seniors to be included in the $1,200 relief checks, although if retired and on fixed income they are “less affected in theory.”  Many are supporting in some way a family member, child or grandchild, so we believe this was fair and the right thing to do.   However, it’s only $1,200, and the real gem for most retires has not been featured much in the media, as our focus has been on our collective health.   IF YOU’RE OVER...

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Posted on Friday, March 27, 2020
We use the term “Tax Planning” often, but we are aware that many people are not sure what it really is.  Some people think “That means off shore accounts and citizenship shell games ending with jail time.  No thank you!”.  That is not tax planning; that’s tax evasion, and it’s not at all what we recommend.  Others think only the wealthy need a tax planner, and for regular folks it can mean paying a 30 year mortgage off 12 years early or having a college fund with enough in it to actually pay for college.  It’s not just for the wealthy, though.  Tax planning can be a useful tool for anyone who is aware of the opportunities.  Our tax code...

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Posted on Friday, March 20, 2020
For many Americans the bad news surrounding the current crisis is all consuming.  Even for those not living check to check, it can still be very stressful.  Employers struggle with using savings, loan lines or selling assets to keep afloat.  Others face layoffs of workers that are practically family members.  There is a lot of heartache out there, as everyone knows.  When you find any silver lining you almost hate to even bring it up.  How dare you be positive about anything right now?  Well I’m going to risk it.  Now is an excellent time if you have an IRA and have been planning (or should be planning) to do a Roth Conversion.  If your IRAs have shrunk like mine,...

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