As early retirement and quasi-retirement are easier than ever in our expanding “sharing economy”, the IRS is clarifying the rules on how much you need to share with your least favorite Uncle. For many people “sharing economy” jobs are their real jobs, for others, a way to fill time during retirement or as an adjunct to early retirement.
The goal here is to drive taxes to zero. The “sharing economy” has several opportunities to earn thousands of dollars per year and legally not report it on your tax return. In cases where you are required to report the income we can use tax strategies to significantly reduce or eliminate income or self-employment taxes.
Some areas of tax law are still unclear as the Tax Court is hearing cases determining issues between independent contractors and employees. These major tax issues generally affect large companies like Uber rather than individuals. As of this writing, most “sharing economy” jobs are treated as small business income and are reportable even if you do not receive a From 1099-MISC.
This is the 116th post here at The Wealthy Accountant. The average post has been around 1500 words, meaning I have published approximately 174,000 words this year so far on this site. That is enough words to fill two average sized novels! I also write two other blogs of flash fiction adding another 153,000 words to my output. That is a lot of stuff to say in one year and it is giving me a sore throat.
Before you recoil in horror, understand I am not going away! For next few weeks to two months I am cutting my publishing pace to three posts per week: Monday-Wednesday-Friday. That is still an annual output of 156 posts or a 234,000 word pace, enough to fill three average sized novels. I would post more, but I’ve already told you more than I know. (Keep your eyes on the ball so the fast ones don’t get by you.)
There is a logical reason for the temporary slowdown. I have plenty of ideas to share, but many of my favorites are festering in the queue waiting for the necessary research. You see, many ideas I can lay on paper in a few hours because they don’t need much research or the work is already gathered and just needs organizing on the page. To give these future posts justice I need to make phone calls and research deeper. I could always throw a few basics out and let you figure out the rest, but that is sloppy journalism and robs you, the reader, of the information you expect and deserve.
I am also concerned over my current quality. I have noticed spelling and grammatical errors when I re-read posts weeks later. Without a separate set of eyes reviewing my work things like that can happen. It is important for me to say what I intend. This is communication and if
My relationship with the gym is an on-again/off-again affair. Three times a week I lift weights and during the frigid NE Wisconsin winter I also run on the treadmill a time or two each week. It isn’t cheap. I consider my gym membership, which covers Mrs. Accountant and me, a luxury and a spending splurge which sets me back about $800 per year.
Over the years I belonged to three gyms. The first gym went out of business and for several years I avoided costly gym memberships. Then an injury required either expensive physical therapy or a more formalized and regular workout schedule. It was a painful injury. I ruptured several tendons in my right bicep when I was butchering chickens. (Now you have another nugget of trivia on me.)
At first I thought I blew out the rotator cuff because I could not lift 5 pounds with my right arm. A visit to the doctor put that notion to rest. The bicep was another issue. That sucker hurt. A few sessions with the physical therapist quickly drew me to the conclusion I would need to take matters into my own hands if I were to heal in this lifetime.
It breaks my heart when I hear reports of police shooting and killing an unarmed black man. This morning I read a report where a police officer in West Virginia was fired because he did NOT kill a man demanding to be shot, a so-called suicide-by-cop incident. Readers of this blog are aware I live in the county where the trial of Steven Avery took place; the topic of the Making a Murderer documentary on Netflix.
Black people are incensed by the killing of unarmed black men by police; they should be. White people are also killed by police, but there does seem to be a bias toward “shoot first, ask questions later” mentality when black men are involved. For a while it looked like retaliation killings of police officers at random would accelerate. It seems to have died down (or I miss the news reports).
Police have been the target of criminals for longer than the Black Lives Matter movement. I agree, black lives do matter and police need to act appropriately regardless the color of skin a suspect has. The moment police are targeted for harm, however, you have to stand up and just as loudly proclaim: Blue Lives Matter, too.
I have been critical of the police most of my life. I am critical of all government. With authority comes responsibility. Police are highly trained professionals asked to run into harm’s way when shit goes down. There is no doubt in my mind 99% of law enforcement officials are men and women of high moral character, values, and ethics. Unfortunately, the 99% of law enforcement officials who are honest are asked to make some very difficult decisions without all the facts, where lives are at stake, and given limited time to make the call. Some days you are damned no matter what you do. There have to be days it sucks to be a cop.
What people spend on laundry is insane. Today I will show you how to cut your laundry costs to 2 cents per load, plus the cost of the machine (your own or the laundromat). Mixing your own detergent and a clothes drying rack combine to reduce laundry costs so much there is no incentive to reduce it anymore.
Making your own laundry detergent and fabric softener is fun and take only a few minutes. As an added bonus, you feel like a mad scientist as you mix your concoction. The best part is I will talk a whole lot less today as I let the pictures do all the talking for me and any time you can get me to shut up for a day is a good day! (A picture is worth a thousand words so I am technically talking your ear off.)
You will need a few ingredients sometimes hard to find. I have included links to Amazon so you can get to work fast. Amazon prices are pretty good on this stuff. The two hard-to-find items are usually Washing Soda and Fels-Naptha. The rest of the stuff should be available locally.
A few months back I was in a conversation where the topic of sabbaticals arose. A member of the group worked for a company that allowed employees a one-year sabbatical in the past, but ended the practice when employees who took the sabbatical tended to never return. According to my friend it was the best employees who decided a sabbatical would refresh and recharge. What the company hoped would be an opportunity for star employees to get away from the frantic pace of life turned into an early retirement plan. I laughed heartily until I realized I have employees and know how hard it is to find and keep good ones.
Different Strokes for Different Folk
Some jobs do not have a halfway point for people to stand between full employment and retirement. That is too bad. Awesome people at the top of their game have and either/or choice: stay fully engaged or dump out completely. It really sucks. All too often employers take just that approach when it is not necessary.
The best employees are the ones who find balance between work and personal life. An employee’s personal life is why they show up for work even if they really love their work. The employee who works ungodly hours for the company never has time to think clearly about solutions for clients or the company. It is the silence between the words where the meaning exists. Without silence between the words or white space between words on the page it all ends up muddled. Sure, you can still read or hear if you focus hard enough, but the energy required is immense and you are still prone to misunderstand some of what is being communicated.
Back in my college days I had a friend who was more frugal than I was. Bill never went out, socialized, or partied. A good night out was the museum if students were allowed in for free or the college library or cafeteria. Spending was off the list.
Bill became such a good friend I asked him to stand in my wedding. He accepted after considering the cost. After college we went our separate ways as life took over. I already had a small tax practice up and going while Bill went . . . I don’t know where Bill went. The last time I saw Bill was when he was on the local news protesting the Iraq War, the first one. It has been a while.
The newscast interviewed Bill for less than a minute. He looked happy and alive wearing shabby clothes and a million dollar smile. He looked as frugal as ever and willing to fight for a cause if it promised to make the world a better place. Whatever happened to the man who stood in my wedding, I’ll never know. I performed a cursory internet search and could not find him. Oh, and he loved the movie, Fiddler on the Roof. His parents had the movie on VHS. (Remember those things?) He never stopped singing If I Were a Rich Man. It was annoying. He is lucky to be a living man.
Tensions were high on September 26, 1983 between the United States and the Soviet Union. By May of 1981 the Soviet Union was convinced the United States was preparing for a first strike nuclear attack due to the rhetoric of President Reagan. Further fanning the fire was the Soviet military downing of a South Korean commercial airliner. Except for the Cuban Missile Crisis, the world was never closer to nuclear annihilation; the only difference is that during the Cuban Missile Crisis people knew how close they were to disaster; in 1983 the world knew tensions were high, but seemed blissfully unconcerned.
Stanislav Petrov agreed to fill in as commander for his friend on September 26, 1983 at Serpukhov-15 of the Russian Aerospace Defense Forces. His job was to watch for a surprise nuclear attack from the United States and her NATO allies. The United States had promised to install 108 Pershing II nuclear missiles along the Soviet border (they did in late November 1983) which could strike Soviet targets within ten minutes of launch and of which the Soviet Union had no defenses against.
The Soviet leadership was convinced the United States was waiting for any opportunity to launch a full-scale nuclear attack. Under this heightened tension the alarms blared shortly after midnight on September 26, 1983 at the Serpukhov-15 facility. The early warning satellite system reported one in-bound missile! Everyone in the room started screaming at Stanislav to launch a full scale nuclear attack against Western Europe and the United States.
Stanislav, the substitute for the evening at the early warning detection center charged with launching a retaliatory nuclear strike should the Soviet Union be attacked, hesitated. Something was not right. The whole room demanded his attention at once increasing the risk he would make a critical error in judgment at the worst possible time.
Only one missile? Stanislav thought. If the U.S. launched a nuclear attack they would send hundreds in an attempt to disable the retaliatory capabilities of the Soviet defenses. It had to be a false alarm.