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Posted on Friday, August 10, 2018

Many people don’t really think about their taxes until the snow is flying and the first document arrives in the mail.  Why would you, right?  Year in and year out people often get into a set of habits around getting things together for their preparer.  That`s usually not a bad thing, but in a year like 2018 when so many things have changed we see on the horizon a sea of surprised faces when they find out their usual $1,200 refund is now a $500 balance owed to the IRS.  Or their usual $1,000 tax bill is now $1,900.  Of course, like any changes there will also be winners receiving happy surprises.  But what side will you be on?  If...

The post Are You Changing Your Behavior to Match the New Tax Rules in Effect Now? appeared first on Tax What If Doctor.

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Posted on Friday, August 03, 2018

First, let’s say upfront that a business that has sources of income and expenses and leaves 25% profit on the table is an awesome business!  Example: A Plumber makes $400,000 a year and spends $300,000 a year on plumbing tools, trucks, repairs, staff, insurances, etc., and walks away with $100,000 at the end of the year that he can put in his pocket; great business!  It would be rare that it’s that easy.  More likely, he puts $60,000 in his pocket and sneaks a few personal expenses into his plumbing books.  In a very rare case in the other direction, 50% in expenses and 50% profit, but he probably wouldn’t do that every year.  That would be a “magic year” with no repairs to fleet vehicles, no staff turnover,...

The post Helping Clients Not Pay Tax on a Type of “Phantom Income” appeared first on Tax What If Doctor.

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Posted on Friday, July 27, 2018

The tax code is much more fluid than the public is truly aware of and deductions and credits come and go all the time.  Deductions like mileage for business owners change with the cost of gasoline, for instance, and can go up and down annually.  Often, it is actual programs that come and go, like energy tax credits or being able to transfer an IRA to a charity directly without paying income tax but still satisfying RMD requirements.  Often, these programs are temporary, and depending on whether the government believes that they have met their objectives, sometimes expire, or may become permanent.  Capital Gains has remained on sale!  It’s been changed over the years, but under the original Bush tax...

The post Does the IRS Really Have “Yard Sales?” Yes, All The Time! appeared first on Tax What If Doctor.

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Posted on Thursday, July 12, 2018

The IRS just gave guidance that a nondeductible IRA may still in fact be converted into a Roth IRA.  For those who didn’t know about that planning strategy in the past, at a certain level of income people were no longer allowed to deduct their IRA contributions.  Many advisors thought that the rule was that the higher income earner could not open an IRA, which was incorrect.  You simply lost the ability to deduct them. Why would I open an IRA that I could not deduct?  It was still tax differed growth after it was opened, so a “tax differed annuity” that could be invested in any way an IRA could be.  Later, with the creation of a Roth IRA...

The post Finish Line 2025 a Marathon for Tax Planners and Their Clients appeared first on Tax What If Doctor.

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Posted on Friday, June 29, 2018

In May, people will be filing there 2018 Tax Return in another 7 months with a recurring Moooooan and Grooooooan. Now is the time to take your preventative medicine and avoid the pain! We all form habits, we are human. We try to develop good ones to replace the bad ones and often we are successful but most successes don’t come without a coach, cheerleader or some kind of support. Tax Time is usually a time of regret over not being successful at last years promise to oneself, “I not going to pay this much again, I`m going to keep better records and search out a Tax plan or some professional help and get smarter about this!” Then summer comes...

The post Summer is the Time to Fix your Income Tax Problem! appeared first on Tax What If Doctor.

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Posted on Friday, June 15, 2018

There is so much good in the business world from the new tax laws that we feel bad to even mention this, but we did lose some deductions that had become automatic in so many minds that we feel we must! As business people ourselves and for as long as we can remember, taking a client or prospect out to eat or to a round of golf or a concert has always been how business is done!  Then tax deducting it is also how business got done…NOT ANY MORE!  It’s time to review the old and new tax rules, and perhaps nothing changes, as business getting done first always trumps (no pun intended), and deducting it was a pleasant after-effect.  Perhaps the fact that deducting meals with prospects was allowed you to splurge...

The post Remember Client/Prospect Meals and Fun are Largely No Longer Deductible! appeared first on Tax What If Doctor.

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Posted on Friday, June 08, 2018

It is soon to be celebration time all across the U.S.  Our Independence Day, our birthday is on the horizon.  It is summer, Veterans day and Memorial Day and even the 4th of July make us all think about all of the sacrifices that were made to get us here.  We are very, very thankful.  Everyone should be.  When celebrating most folks focus more about everything that happened in the Colonial period.  The Revolutionary War was the gateway to our independence.  The desire for independence was fought over many things but mainly about taxation.  The Boston Tea Party and many parts of the revolution were spurred in part from being levied and taxed on every single thing that we did.  The quote “taxation without representation is tyranny” was...

The post Financial Fireworks and the 4th of July. appeared first on Tax What If Doctor.

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Posted on Friday, June 01, 2018

It’s June, and people will be filing their 2018 tax return in another 7 months with a recurring moan and groan. Now is the time to take your preventative medicine and avoid the pain! We all form habits, we are human.  We try to develop good ones to replace the bad ones and often we are successful, but most successes don’t come without a coach, cheerleader or some kind of support. Tax time is usually a time of regret over not being successful at last year’s promise to oneself, “I’m not going to pay this much again, I’m going to keep better records and search out a tax plan or some professional help and get smarter about this!”  Then, summer...

The post Summer Is the Time to Fix Your Income Tax Problem! appeared first on Tax What If Doctor.

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Posted on Friday, May 25, 2018

Everywhere I go, like the dandelions popping up all over my lawn no matter hard I work at their extermination, there are cars on the side of the road and the unmistakable buzz of people with “yard sale face” rushing to see what hot deals they can find.  It’s a summer ritual, and as badly we all crave summer, a welcome sign.  The biggest yard sale we have ever seen has been open and running for almost a decade now and still not many people are parking out front and rushing in and THEY SHOULD BE!  It’s the capital gains tax rate and it’s a big sale. Does the IRS really have “Yard Sales?”  Yes, all the time! The tax...

The post Its Yard Sale Season – Don’t Miss the Best One at the IRS! appeared first on Tax What If Doctor.

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Posted on Friday, May 18, 2018

  Now that spring has sprung, it’s easy for people and advisors alike to drop the subject and not want to think about taxes for a while.  That is unfortunate, as most tax advice needs to be given by May or June to have long enough to help your clients when it’s time to file their next tax return.  Send them a contact like this one below and help them plant tax saving seeds they will enjoy next New Year!   Tax Planning has often been misunderstood because the advice that our parents gave us is theoretical and absent the consequences from the tax code.  What do I mean by that?  There are general principles in life that have been passed...

The post Your Parent`s Advice Was in a “Tax Vacuum” and Likely Should Be Ignored! appeared first on Tax What If Doctor.

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