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Posted on Friday, October 22, 2021
In a few months the U. S. will begin filing tax returns again, and at tax firms all over the country people will be making the “E-Trade” Shocked Baby Face (remember him?) when they see they are being charged penalties and interest for under paying their taxes due. Even if they made a 941 payment in the last quarter to cover ALL the tax due for the year, they can still find themselves fined by Uncle Sam as a penalty for not paying equally over the four quarters of the year. A last quarter over payment simply means they underpaid for three quarters and overpaid for one quarter, and no, it’s not “good enough” for the IRS. People also argue...

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Posted on Friday, October 15, 2021
In October, as Halloween approaches, the fall wrap up begins around the house.  Any remaining lawn chairs, storm windows and etcetera, all go into place ahead of the first storm.  Sure, for some places, like Arizona, winter is just a nice break from the heat.  But, for a majority of the country that lives in the snow belt, November means batten down the hatches. The same is true for finance and tax planning.  People start looking at their holiday shopping budgets and looking at their end of year projections (if they’re financial goal setters) to see where they are at.  We often talk about tax planning, but the 911 calls start in early December, and there’s a lot that still...

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Posted on Friday, October 08, 2021
With fall in the air, it’s time to start thinking about things that need to be done to prepare for winter.  The garden harvests are rolling in, fresh vegetables are everywhere and it’s really, really great.  Time to fill up your oil tanks before the price change, and at least know where those snow tires are in the back of the garage.  It’s also time for tax planning. There are so many things in the tax code that have time limitations.  It’s really time to check in with yourself if you want to actually participate in your bill with the IRS.  Taxes can be very much within people’s control, even though they don’t feel that way.  If you’re still out on extension, heads up — you...

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Posted on Friday, October 01, 2021
That’s a reference to an old cartoon where Bullwinkle the moose was about to do a magic trick and would push up his fur, as if it was a shirt, and say “nothing up my sleeves, PRESTO” and pull a rabbit out of a hat.  It would never be a rabbit that came out of his hat, of course.  The trick always went wrong and instead he would pull out Rocky the flying squirrel, his cartoon partner in adventures. Sometimes, when the IRS is defining (or more so not fully defining) tax policy and rules, they do something that has an unexpected “presto” result, and something else comes out of the hat. Normally those “unintended consequences” are exploited right away...

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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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