Tag

frugal living

Early Retirement, Frugal Living, Lifestyle

Tax Deductible, Low Cost, High Speed Internet You Can Take Anywhere

Internet service in the U.S. can be spotty for people living out in the boondocks, like your favorite accountant. Travelers need to hunt for an open Wi-Fi hotspot to stay in touch. Even worse, internet is frequently bundled with cable, forcing you to buy both or face wildly overpriced stand-alone internet service. They got you where they want you and your pocketbook is the victim. There has to be a better way. There is. And since I’m an accountant I want a big tax deduction too.

Internet service can cost $50 a month and more for high-speed broadband. (Please sit for this next part. I don’t want anyone falling and getting hurt.) How would you like fast internet (I’m talking 10 Mbps and higher with 10 people on at the same time) for $41.67 a month, paid annually? That works out to $500 per year. After the first year the cost drops to $400 per year or $33.33 per month. You can take this little gem with you on vacation, too. Your fast and low-cost internet is as small as a cell phone, has a 10 hour battery life and is very portable.

Okay, enough of the baiting. Time to get down to facts, get a tax deduction and details on obtaining this money-saving, tax deductible gem.

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Early Retirement, Frugal Living, Lifestyle

Thriving on Minimum Wage

Minimum wage to riches.

Complaints about wages are rampant in the current news. The common wisdom is wages are too low for people to save for retirement or even pay for basic needs. Today I will dispel this common wisdom and prove 1.) Minimum wage, while not very much, is more than enough to live on; 2.) You can get a pay increase even if the boss refuses to pay you more than the minimum wage; and 3.) Early retirement is possible even at minimum wage and in fact you are more motivated to reach early retirement goals when you are locked at the lowest pay scale allowed by law.

I know I’m coming across as a dick to many people. But I’m right and you know it. I can and will deliver on all three points above in one short blog post. The problem with reaching these goals is you and your spending habits.

My dad grew up on a farm and started his own agriculture repair business back in the early 80s. He noticed his employees were no better off regardless what he paid them. Some were paid very well and still were flat broke.

I see the same thing in my practice among employees and clients. With a larger group to sample, my data is conclusive: Income is not the problem, spending is. Where you live has nothing to do with it. Nothing! Living in a high-cost area of the country usually means minimum wage is higher than the federal minimum wage. Since a few will refuse to believe me, I also included point #2. If you are so underpaid you should be excited to know I can guarantee you a pay increase on a regular basis. That means minimum wage will be history for you, my friend, and your employer can’t do a damn thing about it.

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Early Retirement, Frugal Living, Lifestyle

Medical Tourism: Save 90% on Healthcare and Get a Free Vacation

Even if you read the news poorly you know healthcare costs in the U.S. are astronomical. The U.S. healthcare system is more than double the cost of the world’s second costliest health care system in the U.K. And what do we get for all this extra money we pay for healthcare? Subpar performance. The U.S. currently ranks 37 according to the World Health Organization, right behind Costa Rica and ahead of Slovenia. Pathetic.

Medical issues are the one area of life that can destroy early retirement plans or any illusion of financial independence. To make it worse, health insurance is now required in the United States and it isn’t cheap. For American citizens, you are forced to participate in this inadequate health care system by financially supporting it to your maximum potential.

To add salt to the wound, many medical procedures are not covered. Weight-loss programs, cosmetic surgery, teeth whitening and hair transplants are not deductible expenses on U.S. tax returns, nor is it covered by most insurance. If your insurance does not pay for it, it comes out of your pocket. Many deductible medical expenses are not routinely covered by insurance. Eyeglasses and Lasik surgery come to mind.

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Taxes and Investing

Prepare Your Own Taxes the Right Way

It’s that time of year again where we need to reconcile the previous year’s income for the government. The task can be daunting, but with armies of tax professionals and online software, many people can tackle their tax return with few issues.

The trick is finding the right tax software when you plan on preparing your own tax return. The most popular online packages are dummied down versions of better tax software programs. The Q&A required by most online programs can become daunting (and time consuming) if you have any tax knowledge at all. The biggest problem is finding tax software that is professional grade that offers just enough help to not be invasive.

I want to introduce you to an online tax program I think is superior to other online software: Drake Software. The banner below is a direct link to the software for individual users. It was featured last year on Mr. Money Mustache. It also happens to be the same tax software I use in my office.

Over 50,000 tax professionals use Drake software to file over 26 million tax returns.  My office was one of the earliest adopters of the Drake interface (one of the first 200 if my ID number is any indication).

Back in the late 1980s I sought out a professional software package that was not only robust, but offered economical e-filing. Back in those days it was common for software to charge $35 or more just to e-file. Drake was an industry leader, charging only $1 per e-filed return. My office could offer free e-filing before anyone else due to Drake and their powerful software platform.

Time has only made this software better. Of course, my office still e-files for free, but it is so much more. Drake branched out into other areas of the accounting office. They also offered accounting firms like mine an opportunity to provide an alternative in the DIY tax preparation segment.

What I liked from the start was that Drake incorporated the entire professional grade platform in their online version for people preparing their own return. No other online software offers such a robust program to the general public, in my opinion. They market the program under the 1040.com name.Continue reading

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Early Retirement, Frugal Living, Lifestyle

Kill the Economy and You Will Not Even Notice

It does not take long when you wander the blogs of the ‘retire early’ community before you hear the common refrain: If everybody did this stuff it would kill the economy. To which I promptly call bullshit.

Bill Gates and Warren Buffett managed to not spend over $100 billion of their money over the last few decades and the economy has done fine. In the 1950s the savings rate was much higher and the economy more vibrant. When the research is reviewed there is no doubt excessive debt, a low savings rate and excessive spending have more to do with an anemic economy than any responsible spending will do.

People look for any excuse they can to remain married to their poor habits and lack of self-control. It is easier to complain about successful people than it is to take responsibility for your own actions. Somehow these people have been bullshitted for so long they actually think poverty is the only way to keep the economy going. Really? They think the only way to survive is to spend every nickel they have. They think living on the financial edge of ruin from the first light breeze is what makes the economy purr and provides job security. Where does this nonsense come from?Continue reading

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Frugal Living, Lifestyle, Small Business, Taxes and Investing

If I Were an IRS Auditor

17142377126_48d2650b0cThe IRS has a complex formula in determining who to audit so secret even the government doesn’t know what it is. This secret is the subject of much debate and some even claim to know the formula. (They also have the secret formula to Coca Cola.)

In my neighborhood if you have an S corporation and get audited, I apologize. The lady who handles S corporation audits at the IRS around here was once an employee of mine. I take full responsibility for my limited role in training her. I am ashamed of my behavior.

But an IRS audit is not really an issue for most people. IRS audits are at all-time lows and do not look to be expanded much in the future. Most audits are not the dreaded visit to the IRS office or the auditor showing up at your place. Most audits are of the correspondence type, where they send you a letter. Correspondence audits are generally narrow in focus and are the result of a misplaced number or a mismatch on the tax return with information the IRS has.

Since so few people get audited nowadays, there should be no worry among taxpayers of a visit from your friendly government revenue agent. Still, I audit proof every tax return I prepare and train my employees to do the same. This isn’t cheating either. I am talking about preparing a tax return in a manner that doesn’t encourage scrutiny.


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Early Retirement, Lifestyle

Overreacting Solves Nothing




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Chicken Little and her children.

Chicken Little is in true form this week as the election in the States surprised many. The headlines this morning on CNBC echo and increasing level of alarm: Anti-Trump Portland Protest Turns Into a Riot; Op-Ed: I’m not worried about a US recession, I’m worried about another Great Depression; Trump’s enemies are already paying the price; Donald Trump tweets about unfair protests — then has second thoughts; An ‘ugly period’ for the market is drawing near: Saxo Bank economist.

I haven’t seen such overreacting since, well, I don’t know when. There is certainly a lot not to like about Trump, but overreacting will not make it better. The stock market is rallying on higher interest rates. Financials are doing well while much of the market is down. Overall we saw a nice rally and it might, or might not, be overdone. Over at CNBC again we hear: Cramer warns the rally is ‘getting out of hand’ —better deals found in the trash. Really! Yeah, the market will pull back at some point and there is no reason for stocks to be higher due to a guy winning an election who hasn’t even started his first day on the job.

Interest rates rising rapidly bear watching and could be a problem for housing and the economy as a whole, but as of now the SKY IS NOT FALLING! There are reasons for concern. Unless you are a white man there has been vitriol spewed toward you from the President-elect over the past few years.

Overreacting solves nothing. Rioting certainly doesn’t. Playing into the hand of violence never works. Taking a proactive approach is the only solution. The people most shocked are the ones who worked so hard campaigning for another candidate. I get it. I’ve worked hard for a long period to watch a project utterly fail. But it wasn’t the end. I learned a lot throughout the process. You need to focus your efforts, using what you learned to facilitate change.

People make America great. The guy with the second highest tally of votes won the Electoral College and the election. It isn’t the first time it has happened. And I bet you have experience working with people of less than the highest caliber. We all have. As frustrating as it can be at times, we need to engage our Stoic training. Complaining and whining is not allowed!Continue reading

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Credit Cards, Frugal Living, Lifestyle

Credit Card Secrets






We think of credit cards as those things which allow us to manage our financial lives without carrying money around. Bills are easy to automate with credit cards and paying the card at the end of the month is a simple, one-time, setup online and it is paid in full on the due date without any further action on your part. Even if you don’t record your spending, a credit card has a nice list of all your spending in one neat, compact location for future review.

Those crisp pieces of plastic come with a dark side also. Without constraint, you can dig a financial hole difficult to crawl out of. Make no mistake; credit cards are debt, even if you pay them in full monthly. Debit cards serve the same purpose and are not debt because it comes out of your bank account; when the money runs out, the purchases are declined.*

Previous posts discussed bonuses, cash-back credit cards, and interest free/fee free loans. I consider those the easy benefit of credit cards. Debit cards offer limited bonuses and cash back, but credit cards take it to a whole new level.

There are a lot more benefits to credit cards most people either don’t know about or never take advantage of. I seek to end that problem now. These benefits are worth anywhere from a few hundred dollars a year to thousands, depending on your level of spending and the items/services purchased with the card.Continue reading

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