Taxes; The Good, The Bad and The Ugly

Just in case you missed it…A fantastic webinar, Taxes; The Good, The Bad and The Ugly with Kim Landry, CPA from Landry and Associates.  Kim gave us some great tax strategies and planning techniques to be able to keep more of what you make.

What is a tax strategy that has saved you from paying more taxes than necessary?  Please share.

Please use tools only as directed.

Image courtesy of vectorolie from freedigitalphotos.net

Image courtesy of vectorolie from freedigitalphotos.net

Credit cards cause a lot of pleasure that could ultimately cost you a lot of money and pain if used incorrectly.  Our theory is to use credit cards as a tool only to make your life easier, BUT NEVER CARRY A BALANCE, EVER!  If you can’t pay for the item you are purchasing by the time the bill is due, don’t buy it.  This concept is very, very important.  Many other finance specialists will tell you to never use credit cards, but I would like to believe there are some disciplined adults out there who can benefit from their use.  Be sure to use them only if the total monthly payoff rule is ALWAYS, ALWAYS followed!

What type of cash back or rebate program does your credit card provide?  Please comment.

 

Worth their weight in gold!

Image courtesy of digitalart from freedigitalphotos.ne

Image courtesy of digitalart from freedigitalphotos.ne

A CPA can be a very important member of your investing team who can guide you through the labyrinth of taxes.  They are worth their weight in gold to you and your business.  A true CPA professional can ease your stress and save you lots of money you may have given Uncle Sam because you didn’t know any better.  Here are some tips when working with a CPA to make the most of your time and money.

Form a good relationship.  Once you find a good CPA, stick with them.  They become familiar with your business and they will ask important questions to lead you to a lower tax bill.  Of course, telling the truth is very important because it may make your CPA terminate your relationship and will hurt you if you are dishonest.

Lower your annual bill by being organized.  If you hand over a shoe box fill of receipts instead of a categorized report of expenses, your bill will most certainly be much higher.

Use your CPA in making decisions.  Be sure to consult your trusted CPA regarding purchases and don’t make assumptions.  Those assumptions could be very costly.

We are proud tonight to have our trusted accountant and friend Kim Landry, CPA with us tonight for our FREE webinar to go over the topic of taxes.  Don’t miss it!

 

Please comment on what you learned from the webinar.

 

 

Capital gains, hopefully not losses…

Image courtesy of Stuart Miles from freedigitalphotos.net

Image courtesy of Stuart Miles from freedigitalphotos.net

Capital gains (or losses) are recognized when you sell a capital asset.  A capital asset is almost everything you own and use for personal, pleasure or investment purposes.

 Capital gains are categorized either as short term, held less than one year or long term, held for one year or more.  Long term gains have beneficial treatment in the US tax structure since they are taxed currently at 15% where short term gains are taxed at the individual’s tax rate which can be much higher.  One exception to the rule is the treatment of stock options under section 1256 where gains or losses open at the end of the year or terminated during the year are treated as 60% long term and 40% short term regardless of how long the contracts were held.

We all know taxes are very tricky so there are exceptions to most rules and we encourage always seeking the guidance of a professional.  Check out our webinar on Thursday, January 22, 2015 with Kim Landry, CPA to discuss “Taxes; The Good, The Bad and The Ugly” and she will help clarify some of the tax laws for us.

 What tax strategies are you planning on using in 2015?

 

Where are your eggs? Asset Allocation Webinar

Just in case you missed it, here is a copy of our webinar from Thursday, January 15, 2015, “Where are your eggs?  Asset Allocation”.

Join us this coming Thursday at 7:30pm EST on January 22, 2015 for a very informative webinar entitled “Taxes; The Good, The Bad and The Ugly” with our friend Kim Landry, CPA!  If you have tax questions you would like answered, please send them in to questions@financialfreedomclassroom.com and we will do our best to include them.

If you haven’t already, sign up to get an invite to the webinars on our website.  We hope you can join us!

 

Find a way to make the bleeding stop!

Image courtesy of hywards from www.freedigitalphotos.net

Image courtesy of hywards from www.freedigitalphotos.net

If you are paying PMI (Private Mortgage Insurance) stop it as quickly as possible!  PMI is insurance a lender charges if your down payment on a home is less than 20 percent of the appraised value or sale price.  The following article by Consumer Financial Protection Bureau has ways to remove PMI from your life.  Take action on this!  If your balance is too high, make extra principal payments to pay the mortgage down as quickly as possible.  You can do this!  Even after the balance is low enough to remove the PMI you could continue to pay down your principal with those extra payments.

Of course in a perfect world you wouldn’t have a mortgage at all.  Just imagine…it can happen!

Are you mortgage free or plan to be?  If so, please comment on what it means to you!

 

Ice cream or hot chocolate? Or both?

Image courtesy of criminalatt at freedigitalphotos.net

Image courtesy of criminalatt at freedigitalphotos.net

Here in NH it can get very cold in the winter; in fact it was in the negative digits last week. An outdoor vendor here would sell much more hot chocolate than ice cream. In fact, we have a friend who owns a food truck that targets product for sale during the warm summer months. They quickly realized that only selling ice cream limits their season drastically, so they added cold weather products like hot chocolate to sell year round. This vendor knows the importance of diversification!

Diversification is also very important in stock market investments. An example of this would be if you have $100k to invest and you invested it all in one stock. If that stock lost 90% of it’s value you would have only $10k left. Oh, I shutter at the thought! But if you invested $100k in 10 different stocks at $10k each and ONE of those stocks lost 90% you would still have $91k in your portfolio. Visit the SEC website for more on this topic and tune in this Thursday at 7:30pm EST to our FREE webinar entitled “Where are your eggs?; Asset Allocation” for more information.

What is your diversification ratio mix?  Please share…

Give yourself a raise!

“Hand Puts A Penny To A Heap Of British Coins” by Serge Bertasius Photography from freedigitalphotos.net

“Hand Puts A Penny To A Heap Of British Coins” by Serge Bertasius Photography from freedigitalphotos.net

Does your employer offer a matching contribution pension plan?  If so, give yourself a raise!  It is a guaranteed return.  Consider even contributing beyond the amount your employer will match but ALWAYS contribute to maximize the match.  The IRS has rules and yearly contribution limits.  Check them out at http://www.irs.gov/Retirement-Plans/401(k)-Plans.

Very carefully review your investing options inside the plan and select the appropriate mix of investments to make it grow!  With generous donations and good management your account should keep growing. It will eventually become a large part of your financial support when you retire.

If your company has a retirement plan what is the matching contribution rate?  Please comment.

Pay early and keep more!

“Percent On Falling Cubes” by renjith krishnan from freedigitalphotos.net

“Percent On Falling Cubes” by renjith krishnan from freedigitalphotos.net

Take advantage of any and all early pay discounts.  Why not?  For example, many gas or oil companies offer a discount if you pay the entire balance within a few days of your fill.  For us in NH where it is ridiculously cold and we have at least 5 fills per year, it will allow us to keep about $150 per year.  To break it down, we get about a 4% discount on our fills if we pay within 10 days.  That’s $30 per fill, times 5 fills, equals about $150!  I would rather use that money for something else rather than burning it!

Even paying by credit card would work too, if you absolutely have to. However, the rule is to ALWAYS, ALWAYS pay your credit cards IN FULL EVERY MONTH.  Never carry debt.  If you cannot pay in full, DO NOT CHARGE IT!

How many of you take advantage of early pay discounts?  Please comment.

 

No, I won’t be quiet! The library is a great source of FREE entertainment!

Shhh Stock Photo by photostock from freedigitalphotos.netYour local library can be a remarkable resource for all kinds of savings for your family.  The obvious is all the books they have, but did you know that if you can’t find what you need at the library you can get an “interlibrary loan” so you don’t have to go out and buy the book.  There are also on-line books and audios that you can borrow right from home without going into the library.  The library also has movies to borrow which can eliminate any DVD or Blue Ray rental fees.  Do you like to go to museums?  Many libraries have free passes to borrow, which can be a big saver!  Enjoy some FREE time with your family this weekend, visit your local library!

Photo credit: Shhh Stock Photo by photostock from freedigitalphotos.net