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Posted on Friday, September 24, 2021
The real tax filing deadline is less than three weeks away (Christmas is less than 100 days away but that’s another blog)! There are many reasons people find themselves needing to delay their tax filing.  Sometimes there is no reason, it’s just their least favorite thing to do. “The IRS allows for extensions and for a path to get to October 15th at 11:59 PM before I have to file them.  Why not wait until then?” For many, it’s because they don’t have the money to pay what is due, so they feel like until they send the paperwork in, the IRS doesn’t know.  This is unfortunately not really helping anyone, as the tax payments were due on April 15th,...

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Posted on Friday, September 17, 2021
Every new president makes changes to the tax code, so why is this time so different?  The short answer is because our “books” as a country have never been in worse shape, not even during World War II.  COVID related spending is only icing on the already giant cake of our current federal debt that is the result of the mishandled US financial affairs of the past several decades!  The total national debt as of a week ago was 28.4 trillion dollars, and more importantly, that amounts to 128.5% of the entire GDP of the country.  The previous high was 119% of the GDP in 1946.* In 1941 the two lowest tax rates for Married Filing Jointly (MFJ) were 10%...

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Posted on Friday, September 10, 2021
Don’t let your stockbroker off the hook when it comes to tax planning.  Many people work with brokers when they buy and sell stocks.  Many people now, because of the internet, also have become their own stockbrokers, doing their own research and trading on various platforms.  Whether you use a professional or do your trades yourself, you still need to hold your stockbroker accountable.  What do I mean?  If a broker is helping you buy and sell, they had to take a Series license of some kind.  Sometimes, an RIA (Registered Investment Advisor) has taken a Series 65 exam.  If it’s a representative of a broker/dealer, perhaps they’ve taken a Series 6 or a Series 7 exam.  There are other possibilities, but the point is, these exams...

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Posted on Friday, September 03, 2021
Well, do they or don’t they, actually?  Long debated and often manipulated by the media, the topic of the wealthy and taxation has many, many complex points and counterpoints.  First, when people say that, they often don’t define what kind of tax.  The people hearing the comment usually go to federal personal income tax in their mind as TAXES. However, if a wealthy person owns 20 C corporations, with each filing their own tax returns, those C corporations pay their own taxes and unless the wealthy person needed to take a dividend or other distribution, then they could pay zero federal income tax, even though their companies paid potentially millions in taxes themselves.  The kinds of taxes people pay depends...

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Posted on Friday, August 27, 2021
An often overlooked tax planning opportunity comes from not fully understanding how you can use your cars as a deduction on your tax return.  It is very common for people who have a Schedule C sole proprietor type business to claim their mileage on automobiles, but the privilege of using personal deductions on a tax return is not limited to someone who is filing a Schedule C.  For instance, a landlord might own three apartment buildings and file a schedule E on his personal tax return and not feel like he is “self-employed” as he has a full-time W-2 job. However, the use of his personal car on that schedule E is just as deductible as it is for the...

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Posted on Friday, August 20, 2021
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, August 13, 2021
Hey, it’s still summer outside, so no one wants to think about income taxes, right?  We’re sorry, but it’s time, especially for businesses that are on extension for filing their 2020 returns.  S Corp and Partnership returns must be filed by September 15th (check your state for disaster extensions) and that’s just a few weeks away.  And as for current year tax planning, the most widely used and popular business planning tools available are pre-tax savings plans, both for employers and employees.  401(k), profit sharing and defined benefit plans are all ways for business owners to avoid tax on income earned this year.  Unlike IRAs, which can be started and funded up until next years’ filing deadline, these plans have...

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Posted on Friday, August 06, 2021
Have you worked toward losing weight in the past because you want to look more attractive, or fit into an expensive wardrobe you already own? When you lose weight you often also lower your blood pressure and/or cholesterol as a bonus. It might not be the primary motivation, but the extra benefit is of course welcome! If you are a business owner, then we pose this question. Some time ago you had an idea. Over the years your turned that idea into a successful and profitable business. Have you properly protected what you worked so hard to build?  An unexpected turn of events could put your biggest asset at risk. Did you know that moving business earnings into a qualified...

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Posted on Friday, July 30, 2021
On March 17th,  the Urban Institute, Brookings Institution and their individual authors, reported that because of the small share of the population currently eligible for itemized tax deductions for charitable giving, many charities have argued that a more universal charitable deduction or tax credit should exist.  A more universal subsidy could (but would not necessarily) increase significantly the resources made available for charitable purposes and would symbolize the nation’s commitment to giving as a strong societal goal.  In their brief, they showed that whatever the revenue cost associated with a more universal deduction, policymakers should consider how to maximize the amount of goods and services that can be provided efficiently and equitably to charitable recipients for the subsidies it provides....

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Posted on Friday, July 23, 2021
Go to any party, any backyard BBQ, baseball game or the yacht club on race day and you are likely to hear someone complaining about taxes.   People love to hate them, but they act as if they have no control over them!  Taxes are not a storm over the ocean that “at God’s will” might or might not come to shore and wipe out a town.  They are a known, published set of taxes on various income types, with rules.  Like a chess game, if you want to win you can study the rules and the game and when the opponent makes a move you can make the appropriate counter move and win.  There are offsets and credits in the...

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