Category: Tax Planning
-
Tax planning at the time of layoff
An accountant shared a sad story that reminds me of the need for tax planning by ordinary folks. A 40 year old middle income single guy was laid off from his corporate job last year but apparently did not seek professional financial help until now. He took money out his 401(k) for living expenses without doing…
-
Variance in taxes is part of the game
I have little patience lately for tax accountants who assert that their approach is “correct” and that all other results are “errors”. This is like having the sideline judge disagreeing with the referee on the field that called the play. We understand the mentality that the law is meant to be precise and therefore the results…
-
Tax accounting for hobby income and expenses
If you have an active hobby then you might find that you make some money at it. But it is important to recognize that the IRS makes a distinction between businesses run for profit and those that are hobbies without a profit motive. This post summarizes the four key differences in tax accounting between the two.…
-
Why middle-income tax planning is dead
Bloomberg and Wall Street Journal ran articles this week that compile and analyze federal income tax data. These articles were meant for use as an exposé of policy tax policy. I skipped the social policy discussion entirely and I looked at the data from the perspective of a small solo CPA’s income tax service. It is interesting…
-
Financial Planning Considerations When Your Business is Losing Money
This post was inspired by the stories of some of my neighbors and clients in southern New Jersey. Most were struggling with a weak economy before super storm Sandy hit in late 2012. Those that re-opened over the next few years face continued business losses and the prospect of continued weakening of the local economy…
-
Fixed Asset Accounts in QuickBooks Online
Here is something I learned about the conversion of fixed asset accounts (like machinery or vehicles) from QuickBooks desktop to QuickBooks Online. (While I am a QuickBooks Online ProAdvisor and currently in the middle of studying for advanced certification, many new issues come up on a daily basis that are not obvious or well-documented. This…
-
The brave new world of personal income tax services
This message posted on an online tax forum this week just about says it all: “I normally prepare my own taxes through Turbo Tax; however this year it is telling me I owe an outrageous amount of money and I’ve never owed in previous years. I need someone else to take a look at it for…
-
The latest financial planning twist for same-sex couples
I try to follow developing news for my same-sex couple clients (some now married, some not) and occasionally post something that attempts to summarize or help with planning like this “Financial Planning Checklist for Unmarried Couples” that has turned out to be quite popular. Recall that in 2013 the Supreme Court ruled on a case…