The US Chamber put together a good overview of the stimulus plan for small businesses to help with payroll: https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final_revised.pdf
Everyone remembers the 2018 tax year where payroll tax withholdings were messed up due to the tax law changes. A lot of folks ended up owing tax due to not withholding enough throughout the year.
The IRS has completely changed the W-4 tax withholding form that you fill out for your payroll department. The new form does not have the old number of exemptions that we are all used to, but instead has a dollar amount that you calculate to either increase or decrease tax withholding on each paycheck.
Best part is the IRS has a great tool to help you figure out if you will owe or get a refund and how to adjust accordingly. It only takes a few minutes and all you need is the most recent copy of your paystub: www.irs.gov/w4app
Best part is when you get the results you have the option to print out a new W-4 form with the changes already entered.
Despite this headline, this affects everyone, not just the wealthy. If you inherit Mom or Dad’s IRA, you now have to completely liquidate within 10 years. Before you could stretch it out over a much long period based on your lifespan.
As a consumer you need to understand how your financial professional is compensated:
https://blogs.wsj.com/moneybeat/2013/09/20/decoding-fee-only-sometimes-it-isnt-what-you-think/
Great article explaining the top two credentials in personal finance. Having gone through both programs I’ll have to agree with everything they state, but in the end why not work with someone who is both, instead of choosing one or the other?
If you are holding “active” mutual funds within a taxable account, you can end up with a tax nightmare. 2018 was a good example, market was down on the year but many unsuspecting investors got 1099′s because of active mutual fund cap gain distributions. So your account is down but you still owe taxes!
This year the market is up, but you may still get some unwelcome taxable gains. Here is a good article to explain it:
https://www.barrons.com/articles/the-looming-mutual-fund-tax-hit-51569523180?
As a self-employed individual, you can feel overwhelmed when you search for strategies to reduce your taxes.
Where do we start?
Let’s start with the following 10:
Note: Consult your tax advisor prior to implementing any of these strategies!
If your advisor is selling you an investment that he/she makes a commission on, there will always be an inherent conflict of interest. Is the investment good for the client or better for the advisor’s wallet? This is a more extreme case where investors lost a lot of money, but I’m sure that the advisors were attracted to the 9% commission payout:
Interesting article from the WSJ:
You would think that folks would learn that there is no free lunch and that no investment person can guarantee returns. However, folks still learn the hard way.
ps. No regulated investment professional can accept your investment money via Venmo!