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humor

Lifestyle, Small Business, Taxes and Investing

The Tax Loophole You Never Thought Of

al_capone_in_floridaWhen someone in the local area makes the news for embezzlement it is not a matter of if they will show up at my office, it is when they show up. The same scenario plays out every time. Someone gets caught with her fingers in the cookie jar (usually for gambling) and charges are filed. The district attorney prosecutes the case. (Embezzlement cases make the news and the district attorney is a politician who can’t help getting on her knees to earn some votes.)

Most embezzlement cases end with a conviction, or more often, a plea agreement. The accused is eager to make a deal that keeps her out of prison. The DA and judge soil themselves with the familiar sentencing template. The defense attorney has no choice but to recommend her client goes along with the deal to stay out of jail.

I see the same agreements again and again. The prosecutor demands a brutal repayment plan to the victim, the judge rubber stamps the deals and the accused jumps up screaming, “I’ll take it!”

Then the IRS letter arrives three weeks later and the house of cards is ready to fall. Ill gotten gains, you see, are still required to be reported as income and the IRS watches these financial crimes cases very closely. When the defendant loses or takes a knee the IRS swoops in for their share of the pickings. All that unreported income is now taxed with penalty and interest added. And no money to pay for it.


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Free College Education and a Free Car Too




Before we get started I need to add a disclaimer up front. Periodically a topic comes up at the office where I shed financial advice in a less than politically correct manner. What you read here is a scene that took place as I left the office last night. When I get into one of those moods—usually induced by an overdose of caffeine—the advice I give is solid coupled with a massive dose of sarcasm. If you are easily offended you might want to take a pass on today’s post.

Free College

The topic of college costs came up and the payment of student loans. I have no sympathy. Student loans are a cancer that need to be excised immediately. The argument was other debt should be paid first before student loans. I disagreed. Let’s listen in on the conversation.

Tyler speaking to Dawn: You shouldn’t pay off student loans first.

Wealthy Accountant: Yes you should. Do you know how hard student loans are to discharge? The darn things follow you like the plague.

Tyler: But she has a car loan.

Dawn: The interest is higher on the car.

WA: Yeah, yeah, I forgot about that. Yes, you should pay the higher interest loan off first. You shouldn’t have student loans in the first place. You don’t need student loans to go to college; it’s not part of the curriculum.Continue reading

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