Archive for the ‘General’ Category:

Something to think about

Written on April 4th, 2017 by Jamesno shouts

We never know if this will happen to us or how it could affect our retirement dreams.  A very real disease that we all need to have a plan for:  https://www.yahoo.com/style/this-son-is-documenting-his-mothers-dementia-in-a-heartbreaking-video-series-173544541.html

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pretty soon you will have instant Amazon deliveries!

Written on December 29th, 2016 by Jamesno shouts

New patent from Amazon – flying warehouse with drone delivery:  http://www.cnbc.com/2016/12/29/amazon-flying-warehouse-deploy-delivery-drones-patent.html

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$55B in profit over 28 years

Written on December 22nd, 2016 by Jamesno shouts

Pretty interesting read on a secretive hedgefund.  Sometimes patterns trump fundamentals:  https://www.bloomberg.com/news/articles/2016-11-21/how-renaissance-s-medallion-fund-became-finance-s-blackest-box?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social

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appealing medicare premium surcharge

Written on December 6th, 2016 by Jamesno shouts

To follow up on the previous video post: If you would like to appeal the “income surcharge” attached to your medicare part b premium, here is the form https://www.ssa.gov/forms/ssa-44.pdf

Retirement Minute Episode 15: Social Security & Medicare 2017 increases

Written on November 29th, 2016 by Jamesno shouts

Retirement Minute Episode 14 – “are my social security benefits taxable?”

Written on June 6th, 2016 by Jamesno shouts

worried about getting audited?

Written on April 7th, 2016 by Jamesno shouts

The probability of an IRS audit is fairly low, unless you have income greater than $1M. The numbers below are the audit coverage ratios (published by the IRS) based on the percentage of tax returns in each category audited during the year. We’ve covered some of the redflags that trigger audits in the previous posts, but here are the statistics:

Type of Tax Return Audited                                                     Fiscal Year 2015    Fiscal Year 2014
All individual tax returns                                                                      0.84%                   0.86%
Individual tax returns reporting income of $1 million and higher         9.55%                    7.50%
Individual tax returns reporting income of $200,000 and higher         2.61%                    2.71%
Individual tax returns reporting income of less than $200,000             0.76%                   0.78%
Partnership tax returns                                                                          0.51%                   0.43%
S corporation tax returns                                                                       0.40%                  0.36%
Large corporation tax returns                                                              11.15%                  12.23%
(courtesy of The Tax Book.com)

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Personal Finance FYI – Tax Time!

Written on March 10th, 2016 by Jamesno shouts

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business tax deductions

Written on December 28th, 2015 by Jamesno shouts

The recently signed budget agreement included some tax perks for business owners.  Most business owners are aware of the difference between expensing an equipment purchase in the current tax year vs. depreciating it over time.  Section 179 of the tax code allows current year expensing which can definitely help lower taxable income, but the limits had dropped drastically to just $25,000 in 2014.  The good news is that the limits have now been increased back to $500,000 with bonus depreciation thrown on top as well:

Here is a summary from Section179.org:

Dec 18, 2015 -   The “Protecting Americans from Tax Hikes Act of 2015″ (PATH Act) has been passed by both the House and Senate and signed into law – expanding the Section 179 deduction limit to $500,000. Read the summary from the Ways and Means committee here.

Section 179 will be permanent at the $500,000 level. Businesses exceeding a total of $2 million of purchases in qualifying equipment will have the Section 179 deduction phase-out dollar-for-dollar and completely eliminated above $2.5 million. Additionally, the Section 179 cap will be indexed to inflation in $10,000 increments in future years.

50% Bonus Depreciation will be extended through 2019. Businesses of all sizes will be able to depreciate 50 percent of the cost of equipment acquired and put in service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.

IMPORTANT: Section 179 for Current 2015 Tax Year (This Year)
Section 179 can provide you with significant tax relief for this 2015 tax year, but equipment and software must be financed and in place by midnight December 31, 2015. Use this 2015 Section 179 Calculator (just updated for the new PATH Act) to see how much the newly expanded Section 179 tax deduction can save your company.

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Why I think the Fed is stuck

Written on November 13th, 2015 by Jamesno shouts
A Soapbox on Interest Rates and why I think the Fed is stuck:
I will give you my theory on why I think that even with the recent interest rate volatility, I don’t quite see how the Fed could materially raise rates right now:
Back in the recession when the Federal Reserve started lowering rates and began their QE program of buying mortgage debt and bonds off of the banks balance sheets, many of us in the investment community (myself included) thought that surely this would be inflationary.  You have the Fed printing $4 trillion dollars to buy up their own Treasuries in the market place and buying up mortgage debt from the banks.  The theory was this money would find its way into the economy and begin to reinflate things rapidly (surely the banks would start lending again, right?). The general thought was this would destroy the dollar and ramp up gold, oil and commodity prices.  And it sort of did for a short time.  But in the past few years gold, oil and other commodities have been declining in value and inflationary pressures are minimal at best.  At the same time Japan, China and the European Union began their own forms of stimulus such as QE to try and ramp up their economies.  With the global central banks fighting to pump up their economies there was a flight toward the US dollar which has become the strongest currency in the bunch.  Not that the US balance sheet is any better than other countries, but we are sort of the best looking house in an ugly neighborhood.
So where am I going with this?  The fact is that the US dollar has propelled higher as more foreign investors tried to take advantage of the slightly higher interest rates in the US.  So, if you were a Japanese investor and your long term treasuries were yielding close to 0%, then borrow money locally then convert to US dollars and invest in a 10 year US treasury at 2.3%.  Almost a risk free trade.  If you are big Japanese investment fund do this with billions of dollars and collect the spread and go play golf all day!  Accept economics tells us this should not work for very long.  Something called interest rate parity says that if the US interest rates are at 2.3% and Japan is at 0%, then you can’t collect that spread risk free because the US dollar should depreciate by that same 2.3% amount over the year, so that even if you collected 2.3% in interest when you trade those US dollars back for Japanese Yen (home currency) you would lose 2.3% on the currency conversion and your result is no profit.
However, that trade has worked for more than a year as the dollar has strengthened instead of depreciating against foreign currencies.  A strong dollar is great for us purchasing foreign goods, but it makes for a very challenging time for US manufacturers to sell overseas.  So here is my rub.  If the Fed raises rates it will bring in more foreign investors into US Treasuries and cause the dollar to strengthen even more.  US manufacturers will scream if the dollar gets any stronger. Maybe I’m off on this or being overly simplistic, but with competing countries interest rates much lower than ours I cannot foresee the Fed doing much of anything, except jawboning about how they should raise rates.  Maybe a token 1/4% in December, but for those screaming that rates are going up big time from here, I just don’t see it for awhile.  For that reason, I’m still liking bonds at this juncture.  (the only thing that could change my mind is if the dollar started rapidly depreciating to erase the risk free gain foreign investors are getting, at that point they start selling their treasury holdings and maybe, just maybe rates start to rise)
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