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Ben Franklin quote

The Way to Wealth

By Keith Taxguy, EA / November 7, 2021 /

A government would be considered intolerable if it taxed people 10% of their time in service of the government. Yet idleness taxes many of us much more if we consider all the time spent checking email, our phone, social media and news feeds. All these activities add nothing of value to our lives or to those around us and is no worse than the government taxing you a percent of your time.

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18 Tax-Free Sources of Income

By Keith Taxguy, EA / October 23, 2021 /

Not all income is treated equal. Ordinary income is treated the worst by the tax code. Long-term capital gains are granted preferential tax treatment. And some income is excluded from income entirely. 

When planning for retirement or any financial goal, taxes play a vital role in how quickly the goal is reached. The more tax-free income you acquire the better.

The tax code in the U.S. taxes all income unless specifically excluded by the code. Many sources of tax-free income is limited in scope, applying to very unique and special situations.

The list below contains 18 sources of federal tax-free income. States usually follow federal, but may have more or fewer items of tax-free income. Every reader should find several types of non-taxable income available to them from the list. 

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10-Step Map for an Early Retirement Plan

By Keith Taxguy, EA / October 1, 2021 /

Retirement is the one universal goal. Some plan for a traditional retirement while others dream of cutting their own trail sooner. Early retirement is a worthy goal and achievable with a modest amount of planning.

There are 10 things to consider before you submit your resignation. If you cover each issue properly early retirement will fulfill your dreams. Poor planning could put you back into the workforce.

The map below is a handy guide for your journey. Click on the map to enlarge and print. This map, along with the information below, can have you enjoying early retirement in record time.

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Form 3115: Applying a Cost Segregation Study on a Tax Return

By Keith Taxguy, EA / September 20, 2021 /

This is a step-by-step guide in preparing a tax return, with a filled-in Form 3115, where a cost segregation study is involved, including depreciation adjustments.

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Good Insurance vs Bad Insurance

By Keith Taxguy, EA / September 9, 2021 /

All insurance is a waste of money until it comes time to file a claim. The trick is in determining which insurance is good, protecting you from serious financial harm, and the bad.

When I talk about good and bad insurance I’m not talking about fraud or an insurance company acting in bad faith. What I mean when defining the quality of insurance is the value it brings in protecting against loss.

In most cases, people want the least amount of insurance possible without putting themselves at risk of a financial loss that would destroy them. Auto insurance has a minimum requirement in every state. However, some states allow you to opt out. For example, Arizona allows you to provide a bond, certificate of deposit or deposit cash with the DMV for the minimum coverage levels in lieu of actual insurance. Another example is Virginia where you can opt to register as an uninsured motorist for an annual fee as long as you have a clean driving record.

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$100 bill. Benjamin Franklin.

Winning With Benjamin Franklin’s Virtues

By Keith Taxguy, EA / August 30, 2021 /

Benjamin Franklin might be the most important of the Founding Fathers. His steady hand and silence shouted more than hours of oratory. When younger minds became heated at the Constitutional Convention, Franklin sat quietly until it was obvious the attendees were at an impasse. Franklin, silent during most of the proceedings, suggested a break. Gently, he spoke with several delegates during the pause in the debate. Cooler minds returned and a nation was formed. It is fair to say the United States of America owes its existence to the virtues of a single man. 

Ben Franklin knew he was not perfect by any stretch of the imagination. As a young man he set out to make himself a better person. He learned and shared sage advice still relevant today. At the core he listed 13 virtues he felt were important to master. They provided the formula for happiness, wealth and success.

Long before the modern FIRE (financial independence/retire early) movement, there was Benjamin Franklin. I learned from Franklin that retirement is overrated if you find those things you love to do and keep a healthy level of curiosity in your life. Unhappiness breeds the desire for retirement.

Winning at life, in marriage, financially, in your health, spiritually and physically were covered by Franklin. It was simple to set up, yet difficult to follow. Franklin, fully aware of his shortcomings, listed the virtues he wanted to uphold. Then he held himself accountable each day; never beating himself up for failing, but gently encouraging improvement each and every day.

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The Goal is to Pay No Income Taxes, Legally

By Keith Taxguy, EA / August 22, 2021 /

Taxes. They come in many forms. Some are hidden: corporate taxes are built into the cost of goods and services you buy; excise taxes are included into products like gasoline. 

Others are more visible like sales and property taxes. And then we come to the most visible and dreaded tax of all: income tax. When people complain about taxes they are usually talking about income taxes.

Avoiding income taxes should be easy considering the size of the tax code and the millions of loopholes available. And that is the problem. The tax code is so big that it is daunting so most people have their eyes roll back in their head when they should be facing the tax code head on.

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Identify Your Ideal Client

By Keith Taxguy, EA / August 13, 2021 /

The most common mistake I see in my practice when a client starts a new business or side hustle is that they try to be everything to everyone. This leads to overwhelm, burnout and alienates the ideal client. By identifying your ideal client you increase your chances you will have clients you love working with. And that takes the work out of work.

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