Dangerous Bloggers

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Liar’s dice?

Who is the most dangerous blogger on the internet today? This is a serious question. Think about it for a while.

What characteristics would cause a blogger to become dangerous? To start, the blogger would need an audience to be dangerous. A blog with a modest, but fast growing, audience would have an increasing influence in our society.

Another characteristic might entail new ideas masked as truth. Imagine a blogger telling a story with a broad concept that intentionally excludes many of the facts. A grain of knowledge is a powerful tool to expand learning or it can be a recipe for disaster on a colossal scale.

Have you thought of a few bloggers who might be dangerous? Can you narrow it down to one?

I’ll tell you who I think is the most dangerous blogger on the internet right now. You’re reading him.

That needs some explanation.

The Facts

Things have been pretty darn good around these parts lately. The Wealthy Accountant received nominations in two categories for the Plutus Awards and traffic is climbing for a variety of reasons, including the nominations.

Traffic is over 80,000 in the last month with October looking to break into six figures. Blog revenues are climbing, too. Certain advertisers have turned me into a project. They want some real estate on this blog. Don’t expect more ads, however. I’ve included enough ad space to break up the page and flesh out the design. I love revenue, but user experience is more important than ads by a mile.

TWA is experiencing more traffic referrals. Other bloggers find my work acceptable periodically so they include a mention on their blog or in social media. It gives me the warm and fuzzy feeling so I always re-tweet and share mentions when I see them.

Interviews are more common now, too. People seem to think I have something important to say because my traffic is climbing. It’s a self-fulfilling feedback loop I have no qualms with. Traffic strokes my fragile ego. There is a satisfying feeling connected to acknowledgement.

Every blog appeals to a certain demographic. TWA has an inordinate number of tax professionals (and government officials) reading on a regular basis. That is why I needed to write this post.




Danger Zone

Periodically, traffic spikes to 100 visitors here at the same time. It makes me nervous. This is still small traffic compared to most popular blogs, but it exposes a risk. What if these people actually believe what I wrote? Worse, what the heck did I write a year and a half ago? The risk prolific writers face is not remembering what they published the day before yesterday. It could be age, but it’s not! The sheer volume requires readers to refresh my memory when they ask about my previous work. Feels funny when I get schooled by my previous efforts.

Now we get to the part that makes me dangerous. What I write here is wrong 100% of the time! Sorry.

I better qualify the last statement before I’m hauled away.

Feeling exposed and vulnerable.

When I write on TWA I avoid dry and stale tax explanations. My goal is to write high concept while knowing the details will require working out later.

Take a simple example. If I say donations to a qualified charity are deductible and move on I only told part of the story. On the surface I am right. Pull back the sheets and issues start to crop up.

Charitable donations are deductible if you itemize. Okay, that is still a lie. If your income is high, your itemized deductions might be limited so the deduction is partial.

I’m still a liar! If you retired and have a side gig with no profit and used a Roth IRA to fund your living expenses, you can’t deduct the charitable contribution even if you itemize because you can only deduct 50% of your AGI for cash charitable contributions. The balance is carried over for up to five years where it is lost afterwards.

And I’m still a sniveling liar! What if the alternative minimum tax interferes?

After all the qualifying of my first statement—charitable contributions are deductible—I am still pumping BS. Sitting here writing I can’t think of anything else that might affect my original statement. It doesn’t mean there aren’t any more out there.

As soon as I open my yap on a tax issue I’m a bigger liar than any fisherman who wet a line. And I know it every time I tap the keyboard.

In the tax profession we constantly say “facts and circumstances”. There is no way I can possibly cover every eventuality. I either write dry, staid tax articles where I cover a very, very narrow topic or I write something normal human beings want to read. I choose the later.

Helping the largest number of people requires I write something they want to read.



The Greatest Danger

Tax professionals hound me incessantly. They inform me how wrong I am. I get it.

When fleshing out a concept I intentionally choose what to include. You read that right. I intentionally get it wrong! If I didn’t, I would be bogged down in 30,000 word posts attempting to cover every possible option. Nobody would read it, including your favorite accountant.

Over the next six months I will publish some very complex tax concepts. The first one and a half years of this blog was tame. Now we will start pealing back the tax code in a serious way. Dropping 50 grand into a retirement account is a child’s game from now on. Now we will hyper-charge the wealth building and tax planning process.

The die is cast.

And everything I say will be wrong . . . for you. In each post where I expose a massive tax concept I will be thinking of how it applies to a client or a small number of clients. Your facts and circumstances will be different and so the rules for you will be different.

Another example: A recent consulting session led a client to contact his attorney to set up a NIMCRUT on my advice. He cc’d me in on the email. I wrote back a few questions and upon reply came to the conclusion he would be better served with a donor-advised fund. This is a simpler and cheaper solution to accomplish his needs. Once again, it all hinged on facts and circumstances. And we didn’t even debate all the other pitfalls of charitable donations discussed above!

When I throw out ideas it is a starting point. Complex tax strategies completely fleshed out for every possibility is a book, not a blog post.

Tax professionals should know better, yet sometimes don’t. Shame on you. When I provide a concept you need to dig further. Sometimes I include links when I find web pages that add value to the argument.

You, kind readers, are my greatest concern. Some of you are very versed in the nuances of the tax code; others, not so much. Okay, I am not lying when I publish here, but I may as well be if I can’t communicate an adequate message. The concepts I outline work. Your facts and circumstances determine the value the concept has for you. Also remember, you can change the facts and circumstances sometimes to your benefit.

I understand the difficulty in finding qualified tax professionals to help you with this stuff. That is why I encourage tax pros to share their contact information in the forum. Readers, check the forum often. Post questions so accountants can help you and even offer their services.

Final Warning

It’s time for me to get back to work on the aforementioned concepts. The decisions are hard. Your favorite accountant is far from perfect. If you think I said something wrong, do NOT hesitate to leave a comment or contact me. I find real errors periodically and fix them as soon as they are discovered.

The tax code is too large and complex for my work to always be perfect. Tax professionals need to test me constantly for this to benefit the largest number of people, including you, my friendly tax pros.

Finally, everything you read here should be taken like a Margarita. With a grain of salt.

There seems to be an inordinate amount of interest in my writing notes. Periodically I will includes my working notes that spur the writing of a post for your entertainment. Sometimes these notes have been around a while before I write the post. The final product can sometimes be radically different than intended. Writing works that way at times. My working notes are unedited; I will not correct errors in working notes to preserve the process as it was originally produced. Enjoy.

 

Things have been going pretty good around here. Traffic is up and TWA has been nominated for a Plutus Award in two categories.

My head should be swelling, but instead I am nervous. When I watch the live traffic on Google Analytic I am nervous when 50 or 100 people are consuming my work all at the same time. WHAT IF THEY ACTUALLY BELIEVE WHAT I WROTE?!?!

Blogging tax advice is dangerous and I know it. I make intentional errors for the sake of fleshing out a concept; I incl ideas few will benefit from but have to incl it. Posts need to stay reasonable in length. 20,000 words of taxspeak is sure to snuff out a few lives of readers. Three, maybe four, tax pros might stick around for the punch line, but I'm not holding my breath.

Tax charitable deductions as an example: to a qualified charity they are deductible. Right? No! First you must itemize, not make too much and phase out, have income because only 50% of cash donations count and AMT might be an issue. One simple remark is technically correct, yet fundamentally wrong and I know it when I write. Facts and circumstances change the answer.

So I tell readers donations to a qualified charities are deductible and hope for the best.

It's the risk a blogger takes daily.

Considering the risks this blogger takes with the public it is a wonder he hasn't been committed.



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Keith Schroeder

15 Comments

  1. Nick True on October 9, 2017 at 7:46 am

    Personally, I’m pretty excited for some of the tax code nuance posts.

    Looking forward to it Keith. The tax code is mind-blowingly complex, and I like your style. I’m excited to see more… Even if it does still require a lot of work on my part because of my facts and circumstances.

  2. Mrs. Picky Pincher on October 9, 2017 at 7:58 am

    Congrats on the Plutus nomination! I’ll be rooting for you. 🙂

  3. Dave @ Married with Money on October 9, 2017 at 8:49 am

    Woo, Plutus! Congrats. 🙂

    I totally know what you mean though about giving our ‘false’ information; the fact of the matter is, it’s impossible to give perfect advice that applies to a broad audience. Someone somewhere will disagree. Someone somewhere will have a different scenario and so what you write about won’t apply to them. That’s okay – that’s what happens when you read a blog. Unless you’re getting 100% personalized advice and feedback, you need to do your own due diligence on things like that.

  4. Mimoza on October 9, 2017 at 11:51 am

    Hmm, if I’m not mistaken, your blog will more geared towards small business owners or people with good side income going forward. I inferred that from your mention of “50k towards retirement accounts looks like a child game”. But aren’t those serious business owners and gig makers too busy to read blogs? Probably I’m mistaken.

    Now re charitable contributions, I’ve got a serious question ;-).
    If I’m not a high income person and I’ll do a schedule A this year, is there a limit how much I can show for non-cash and cash charity contributions without risking to receive a letter from the IRS?
    Say I make 4 runs to Goodwill during 2017 and each of them would be of $100-200 value (GW sells $1-3/item and say I give 100 items each time). Should I be safe to show $400-800 total on the schedule A or should I limit to $250 total because otherwise IRS might ask for the proof what crap I took to GW. All I get is just a slip of paper that I delivered something. I don’t think I want to take pictures of kids clothes/shoes unless I must.
    I understand that cash charity should be easier. If I give $1K to school, library, and a church, I’d get a receipt from each, and I’m fine to show $3k on the Schedule A. Correct? I’m not positive with the GW (non-cash) petty items, clothing.

    PS. FYI, I don’t have so much crap, but this is for my understanding purposes due to seeing $250 on the form and a note that if it’s more then you need a proof of some sorts or something like that).

    • Keith Schroeder on October 9, 2017 at 12:17 pm

      I wouldn’t make those assumptions, Mimoza. The max $54k/$60k 401(k) limit is what I eluded to. However, what I am saying is that saving is defense and earning is offense and I will add more offense to the next few months while maintaining the defense (savings and tax reductions). I have a few ideas on the burner to help readers increase earnings a lot on one hand and defer the taxes until much later, if not outright avoid much of the tax permanently.

      On charitable contributions, the safest route is to deduct what you legally can. I covered the non-cash charitable deductions in a past post:

      https://wealthyaccountant.com/2017/03/31/never-miss-a-charitable-deduction-again/

      Donations other than cash of $500 or more need to be listed on Form 8283. Nothing you mention should give the IRS indigestion. The $250 rule is for contributions of $250 and over requiring a statement from the charity no goods or services were received in exchange for the donation.

      Mimoza, don’t worry about some of the new stuff I present. Not every idea applies to everyone. Over the next six months I have several side gigs you are sure to want to read up on. And avoiding tax on all this juicy extra income is icing on the cake.

  5. Robert @ The College Investor on October 9, 2017 at 2:12 pm

    Hey Keith,

    A few things to always remember – you can be sued for anything. You’re taking a risk giving private advice (i.e. via email one-on-one), but you have minimal risk giving public information. If you post on the blog or in the comments, it’s much more likely to be taken as your opinion versus fact, and even less likely to be construed as any attempt at a fiduciary relationship.

    When you respond to reader emails, you suddenly take things one-on-one, greatly enhancing your risk. A better approach would be to point readers towards articles you’ve already written on the subject.

    Also, disclaimers work for you. In emails especially, start with it. On your blog, I don’t see any really. Consider an FTC-type disclaimer up top, potentially a comment disclaimer below.

    Nothing can prevent the inevitable, but you stand stronger ground being prepared.

    • Keith Schroeder on October 9, 2017 at 2:22 pm

      Robert, several disclaimers exist throughout the blog and on each email sent from my office. This is far more strict than required by the IRS or FTC. The reason: Credit card companies have serious disclosure requirements many times more strict than the FTC or IRS.

  6. Full Time Finance on October 9, 2017 at 7:10 pm

    I struggle with some of the same concerns. Really any finance advice, even that outside of tax, is dependent on a persons unique situation. I always try to give equal air time to multiple ideas and add a disclaimer to each post regarding the personal aspect of finance. One can only hope people read that part and take it to heart.

  7. Physician on FIRE on October 12, 2017 at 10:18 am

    As you point out, you can’t possibly cover every combination and permutation when discussing investment and tax concepts. As long as you’re giving factual and honest advice, you’re not a dangerous man. Well, maybe you are, but not for the words on this site.

    The dangerous bloggers are the ones with questionable kknowledge and information that is just plain wrong. In the last few months, I saw a personal finance blogger legitimately ask if he should move his retirement accounts from Vanguard to ED Jones. I read a post the other day on a dividend focused site that said most states don’t tax dividends. Wrong.

    Best,
    -PoF

    • Keith Schroeder on October 12, 2017 at 11:28 am

      Yeah, I know what you mean, PoF. Some bloggers are really dangerous. Many political and hate blogs are a problem. What I was pointing out is that when a blogger with good knowledge (you and me) say something it can be dangerous because we a be right, but might miss a nuance. I don’t really think I’m dangerous. My goal was to inform readers I tell the part of the story I think is relevant; something could be missing, therefore, readers should use my information as a starting point.

      I’ve read some of the blogs you refer to. There is a lot of outright “wrong” info out there.

  8. Cubert on October 12, 2017 at 2:03 pm

    Congrats, Keith! Good luck when the awards are announced.

    Keep up the great work here. Writing about the tax code and keeping it spicy seems challenging as heck, but you’re getting ‘er done.

  9. Not a Fire Blogger on October 13, 2017 at 6:44 pm

    I respect this post very much. If anything, it adds credibility to your site. It is my hopes that all blog readers keep this in the forefront of their minds as they read (and carefully screen) FIRE blog posts.

  10. Margin of Saving on October 25, 2017 at 12:34 pm

    I work in finance. Any piece of information, especially when found online, has to be taken with a pound of salt. Use at your own risk.

    Just be glad you’re not giving out legal or medical advice:)

    • Keith Schroeder on October 25, 2017 at 3:17 pm

      . . . or explosives. Just say’in.

      • Margin of Saving on November 3, 2017 at 10:34 am

        I would pay to watch a YouTube channel with explosives. In case you decide to diversify your income streams:)

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