Numerous benefits available tax-free to employees do not apply to 2% shareholders of an S corporation. With the C corporation tax rate at a low 21% and dividends likely qualified (taxed on the personal return at the long-term capital gains (LTCG) rate), double taxes may no longer be the issue it once was.
For some individuals, the LTCG tax rate can be 0%. This stops double taxation of dividends in its tracks. Even if dividends are taxed it is at the lower LTCG rate rather than at ordinary income rates. The top LTCG rate is currently 20%, however, there is a small (on percentage terms) additional tax on higher incomes that could push the effective LTCG rate to 23.9%.
But the benefits are the real prize. How many fringe benefits you give the owners will determine if the C corporation is better for you. Some of these benefits are massive, allowing for 5-figure deductions. Something you can’t do with an S corporation.Read More
Why do I or should you care about frugality? Does it really matter if we don’t count the freebies of life in our frugal measurements?
Actually it does if you consider your impact on the climate and the world at large. The impact on the environment is your concern as it does affect quality of life. If you dump pollutants into the air with reckless abandon you by default give permission to others to do the same. When the herd of lemmings run off the cliff in synchronized fashion it makes a splatter spot at the foot of the cliff noticeable to all.
Keeping spending low by pushing the cost on somebody else is a bit rude, but acceptable in our modern world. The spending shift is sometimes by design of those doing the paying; those without any real frugality concerns. These gifts are nothing more than inducements to get you—or others in your sphere of influence—to take up the additional consumption.Read More
Camp Accountant is officially in the books and there was money to be made and taxes to be cut. There were lots of smiling faces and new friends made. It goes to prove you do not have to be a tax professional to enjoy this stuff. (Anything that keeps money in your pocket automatically generates…Read More
Letters from the IRS scare the bejesus out of taxpayers. Unless you can see a check through the envelope window it is doubtful it is good news.
Office policy is straightforward. When a client comes in with the nasty-gram from the IRS (or state taxing authority) we immediately get a power of attorney (POA). Once the POA is signed we contact the taxing authority to get what they have and determine what they are looking for.
Income tax audits are most feared. However, the real audits that require a fresh Depends are the state sales tax audits. Sales tax has so many moving parts and is so complex it is virtually impossible in many states to avoid running afoul of the rules. Wisconsin is one of those states.Read More
Let’s use The Sanders plan because it illustrates the negative consequences easier. An 8% wealth tax would be paid by those with say $50 million or more in net worth. You can go to a billion net worth if you want; the problem is the same.
The assumption of a wealth tax is that rich people only do stupid or irritating stuff with their money and don’t deserve it. I mean, thing about it. Elon Musk is building new businesses and technologies with his billions. How rude. Those created jobs are not worth it if we as a society must look at a billionaire like Musk.
Yes, I’m being facetious. That is the point. How can Musk create the technologies of tomorrow that will benefit the nation and environment, create jobs, and provide better products without the resources to do so? I don’t know if anyone has noticed, but it takes serious cash to start an electric car company, solar company and a space travel company. Without the super rich these dreams would go unfilled along with all the jobs.Read More
Life is filled with stress. Since I’m one of the few in the FIRE and PF communities taking consulting sessions I get to hear a lot of stories first hand. People have real challenges and they hurt, deep inside. They want so badly to unyoke themselves from student loans and debt. So badly want to reach financial independence so they can pursue their dreams. The ones feeling wanderlust to travel the world are the minority. So many want to start a business or explore their creativity. They have beautiful minds.
Ryan Holiday has always been a fan of slowing down and experiencing life. It is a lesson this author struggles to learn (or at least heed). In Stillness Holiday gives us 34 stories to motivate us to stillness, that peaceful calm where we are content.Read More
The knowledge doesn’t have to come from you, I continued. You would be surprised how often the best insights come from other students as they ask questions and debate answers.
As I said to Kimberly, it is unlikely we will ever cross paths again. There is nothing to lose. Nothing to be embarrassed about. This was not about personal gain; it was about paying-it-forward. It is the only thing that gives life meaning; helping others find meaning in their’s.Read More