Over the years I have retired many times. So have you.
The demographic of this blog leans heavily toward early retirement. This has always bothered me. I always feel like I have to be an apologist for all the folks enjoying their work. Life would be less bright for me and my brethren if we were forced to do what we enjoy most, less. Why is this? What is the hang-up with this retirement thing?
Zig Ziglar, God rest his soul, pointed out to me 30 years ago what retirement really means. I only met Zig once and it was enough. We talked and shook hands. In that short meeting I confessed to Zig I was going to cash it in and sit around reading all day. Now Zig is a good guy. He didn’t say nasty things to me, but for the smallest fraction of a second his face had a tell. I knew Zig was going to tell me something profound.Read More
Tax season is officially over and not a moment too soon. As much as I love the work, when months go by without a day off it begins to wear on me. The worst part is the sitting. Too many hours planted in a chair coupled with sleep deprivation and health is not getting the attention it needs.
Loving something as much as I love tax work is also a challenge for people around me. Mrs. Accountant is an angel, allowing me the opportunity every year to disappear for months to help complete strangers and semi-strangers with their tax, accounting and financial problems. My daughters have learned from an early age dad is a very intense man when it comes to his work.Read More
The demographic reading this blog does the things necessary to retire early. The same demographic believes in a side hustle to retire even earlier or to fill time once work becomes an elective. These facts make hobby rules an important consideration. The tax law has a massive loophole few use.
Accountants in the room will understand what I say next. A client walks in the door and his hobby finally turned a few dollars of revenue. No worries, the client says, I can lose money in my business for three years before I have to shut it down and start over. The client actually thinks there is a rule saying you must make a profit 2 out of every five years. By this yardstick, Tesla, a publicly traded company, would have to shut down. (Tesla has a decade of loses as I write this.)Read More
A few weeks ago I wrote about the massive tax benefits to investment property owners and business owners who also own commercial real estate using a cost segregation study. Some of you took me up on the offer and now are up for a significant tax reduction. Then the problems started. I didn’t anticipate the large number of tax professionals who didn’t know how to handle cost segregation studies on a tax return.
Before you call your tax preparer bad names, know most tax professionals rarely, if ever, see a cost segregation study in their office. When the rules changed a few years back I doubt 1 in 100 accountants handled their client tax returns correctly as it pertained to the repair regs and tangible property rules. The good news is the changes only required certain actions in the first year of accounting method changes. The bad news is that most tax professionals don’t know how to handle a cost segregation study on the actual tax return when a client comes in with one. Not to worry. Your favorite accountant will spill the beans on how to get it done right. No picking on your accountant either. This is advanced tax planning and tax law can be miles from tax application at times.Read More
When life is good the revenuers have a way of raining on the parade. A large year-end bonus, mutual fund distribution, or large year-end sale at your business can crimp your tax situation in more than one way. A quick call to your accountant gives you the answer: Make an estimated tax payment.
But making an estimated tax payment can hurt you! A quick payment at the end of the year to eliminate a tax liability still subjects you to an interest penalty in many cases. What you need is a quick and dirty guide on estimated tax payments to avoid nasty surprises, and even better, a way to game the system. (Who doesn’t like gaming the tax system? It’s this accountant’s favorite pastime.)Read More
There is a ritual the accounting profession goes through every autumn. Eager tax professionals attend continuing education programs to hear all the latest tax law changes with interpretation. Large hotel venues fill with CPAs, enrolled agents, and even attorneys eager to learn. The room is filled with tax professionals all from within a hundred miles.
It amazes me how small the accounting profession is. Tax professionals are an even smaller crowd. A handful of conferences draw nearly the entire industry in each geographic region of the country. Smaller programs abound, but the annual refresher courses with tax law updates bring out the vast majority of the industry.Read More
An old nemesis has returned to the United States and other nations around the planet: protectionism. These leaders, and the voters who bought their snake oil, falsely believe protecting their borders by building walls, taxing imports, claiming currency manipulation and threatening to dissolve trade agreements will bring jobs back home. They’re wrong.
What these well-intentioned people forget are the lessons of history. They forget about The Tariff Act of 1930, also known as the Smoot-Hawley Tariff, the one piece of legislation that hastened, accelerated and prolonged The Great Depression. People forget about the jobs created that did not exist before due to current trade agreements and the lower prices consumers paid for goods and services.Read More
In my last post I discussed how difficult it is for personal finance bloggers to find fresh material. There are a few areas where fresh material is always available: spending reports, net worth reports, and investment reports. My spending is boringly low so I rarely share those numbers. Net worth reports are fun to watch as people go from zero to millionaire; afterwards it becomes bragging and tends to discourage those starting out.
Even though we all have a timeline where we reduced/eliminated debt and built our net worth, each personal story is a marker along the road to financial independence. Readers love these stories because it provides a framework as they reach for their financial goals.Read More