Taxes and Investing
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
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
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
Several false starts have finally ended in a real Camp. The changes were important. I was pushed to do a Camp by someone else’s rules and it kept falling apart. I finally decided to have the Camp right where I want it: a short walk from my tax office.
I also decided I would run it my way. These things are a lot of work and I expected somebody else to do all the lifting. I would show up would be my contribution. That does not work.
Instead of the traditional FI and FIRE camps around the country, I settled on a one-day event. I brought in two speakers and all attendees get a Wealthy Accountant t-shirt. We also will tour my office so the proletariat can see how the bourgeoisie works in his natural habitat.Read More
Both debt buying hedge funds I managed did well; the first significantly better than the second. More important than the money was the experience I gained. I know the intimate details of buying, selling and collecting debt.
And I have contacts.
When I ran across the John Oliver video I had to watch. Nothing much has changed since I ran those halls.Read More
It is temping to think you know more than you do when your stash grows. Success gives the illusion of intelligence. When the crisis arrives the illusion evaporates.
Please, kind readers, use common sense. If you don’t fully understand the concept and the financials then take a pass. Better to miss a deal than to go all-in on a scam.Read More