Recent Posts

Pages: 1 ... 8 9 [10]
91
How to Become a Wealthy Accountant / Re: Apparently not?
« Last post by Nords on December 02, 2017, 11:32:10 AM »
Given the barren nature of this forum, is it not possible to become a wealthy accountant?  :)

Actually, I am curious, while far from a tax expert, it is clear to me that the vast majority of Americans have exceptionally simple tax returns and the Major Tax Preparers out there seem to charge an inordinate amount of money to prepare a simple return.  Has anyone else con sidered starting their own tax prep service?  Presumably there are some insurance requirements for Errors and Omissions, etc. but this appears to be an area with low barriers to entry, other than understanding the byzantine US tax code. 

Any others considering/doing this and emulating Keith?
My brother-in-law has over 30 years' experience as a tax CPA.  He reached FI several years ago and he's cut back to a day a week.  His biggest complaint over the decades has been the craziness during tax season (late Jan - late April) and the end of the fiscal year (September for most).  On the other side of that, we have a local CPA on Oahu who's in his late 60s and says he'll never retire.  When his friends retire (or die) he folds their businesses (and employees) into his. 

Accounting has value if you love it for the challenge & fulfillment.  But if you simply see it as a path to riches then I think burnout happens sooner rather than later.

Tax prep (the niche of accounting) is a commodity service with prices racing to zero.  Instead of trying to run one of those businesses, maybe it's better to be a contract worker or temp labor.

By the way, Philip Taylor (of FinCon and PTMoney) is also a CPA... but he seems a lot happier with his current entrepreneurial endeavors instead of accounting.
92
How to Become a Wealthy Accountant / Apparently not?
« Last post by markporter on November 30, 2017, 09:45:24 AM »
Given the barren nature of this forum, is it not possible to become a wealthy accountant?  :)

Actually, I am curious, while far from a tax expert, it is clear to me that the vast majority of Americans have exceptionally simple tax returns and the Major Tax Preparers out there seem to charge an inordinate amount of money to prepare a simple return.  Has anyone else con sidered starting their own tax prep service?  Presumably there are some insurance requirements for Errors and Omissions, etc. but this appears to be an area with low barriers to entry, other than understanding the byzantine US tax code. 

Any others considering/doing this and emulating Keith?
93
I need a Tax Accountant to Help Me With ____ / 401k - "Age 55 Rule"?
« Last post by markporter on November 30, 2017, 09:17:13 AM »
The "Age of 55" Rule for a 401k specifies (I believe) that, if one separates from their job at age 55 or older, they are permitted to withdraw any amount from their 401k and not pay the usual penalty for withdrawals prior to 59 1/2.  Any withdrawal is taxed at the individual's ordinary income tax rate.

Could anyone confirm this for me?  Everything I've found seems to indicate this but some have questioned if a SEPP (Substantially Equal Periodic Payment) over 5 years is instead required.  There is no question that a SEPP is a requirement if the vehicle is an IRA.  But it appears a 401k has special status with regard to early withdrawals after 55.

Appreciate any insight!
94
FIRE / Re: What is my FIRE number
« Last post by Veiled on November 25, 2017, 10:07:11 PM »
And depending on whether or not you buy medicare gap insurance (for what Medicare does not cover) at 65
Thanks..I didn't think of gap insurance...
Sad that we have to think of it, sad that almost no one does. In healthcare when someone doesn't have gap and they can't pay for what they need, we say they're in medicare D's "donut hole."
95
Taxes / Re: 401K to hold a trust?
« Last post by Veiled on November 25, 2017, 10:01:19 PM »
PTF.
96
Taxes / Re: Pre-paying property taxes - huge risk-free rate of return?
« Last post by Veiled on November 25, 2017, 10:00:03 PM »
Hi Dallas! Welcome to the forum. I'm not an accountant but I'll give this a shot as a fellow investor:
1. Yes, this line of thinking is accurate.

2. People typically pay 2 years worth (pay year 1 in early January of year 1 and year 2 in late December of year 1) and take the standard deduction in year 2 because of the lack of flexibility in the entities collecting property taxes. Every place is a little different, but if you are indeed from Dallas then this page/phone number might be useful to you. You may note that this CTA accepts past years' balances but there are no permissions for future years extended on this page. A phone call might clear this up for you, but in general municipalities don't want to be in your debt, and you don't want them to forget you pre-paid for 10 years in all their red tape.

3. Just like there is non-unique market risk to every portfolio (i.e. the risk of total stock indices), there are non-unique political risks to every portfolio (i.e. laws about RMDs, contributions, and taxes). At any point, congress can change the rules. Just like JL Collins says, modify your unique risk and accept the rest.  Accept the fact that we may all lose (or gain?) the ability to avoid future tax with various legislative events. It doesn't make sense to put 10 years of money into the city of Dallas' hands and possibly get into a big headache in 8 years, just to save some taxes this year.

Edited for spelling.
97
Taxes / Pre-paying property taxes - huge risk-free rate of return?
« Last post by DallasFI on November 25, 2017, 12:03:54 PM »
My situation is I have essentially zero deductions each year except my property taxes, which are roughly equal to the standard deduction for single individuals - $6,300. So based on that, I wouldn't itemize.

But I've read you can deduct property taxes in the year you pay them, not the year they are due (http://smallbusiness.chron.com/tax-advantages-paying-property-taxes-year-early-21437.html for reference), so I could pay 2 or 3 years of property taxes this year and be above the itemization threshold. My marginal tax rate is 33%, so by paying an additional $6,300 this year I would save a third ($2,100) of that in taxes. It seems equivalent to earning a $2,100, risk-free, after-tax return in return for making a one year loan (the loan in this case is paying the $6,300 a year before I would otherwise pay it).

First, is this line of thinking accurate? Second, how extreme can you go in this direction (i.e. can I pre-pay 5 or 10 years now? and wouldn't pre-paying now insulate me from the risk that the current tax reform proposal might strip away property tax deductions in future years?).

Thanks in advance to Keith or any other wise, wealthy accountants who can help me think through this situation.
98
Investing / 403(b) affecting side hustle tax sheltering
« Last post by Veiled on November 19, 2017, 08:11:40 PM »
I am employed by a hospital and have a 403(b), no 457. I also have an unrelated side hustle that  eventually may produce enough profit so that I can use a solo 401(k) to shelter more of my income from taxes.

But as I read more about 403(b)s, I understand that they are "controlled entirely by the employee." I'm confused by how this affects my plan to sequester not only the maximum (employee pre-tax, employer, and employee after-tax) into a 403(b) but also into an unrelated 401(k). How much can I put into a solo 401(k) if I'm maxing out a 403(b)?

Better question: where do I go to learn about tax code to answer these questions myself?
99
Investing / Re: Solo 401k recommendations
« Last post by Veiled on November 19, 2017, 08:06:21 PM »
Fidelity seems to win out whenever I hear this discussed. Ironically, I've heard they give better access even to Vanguard funds (or admiral shares with lower ERs).
100
Entrepreneurship / Re: Multiple Side Gigs- accounting and tax help
« Last post by Veiled on November 19, 2017, 08:00:33 PM »
I would advise to continue to file as a sole proprietor and claim the income as business income.... On top of that you are intending on making a profit in future years. To try and take the position that teaching piano lessons is a hobby and not a business venture is pretty thin.
I had the same reaction to that post. I thought "d'oh! I could have saved myself so much SE tax last year!" But I realized that I'm intending to make money for years on my side hustle and I agree with Maccountant. I think WA's idea makes most sense if you plan not to continue the activity more than 2-3 years.
Pages: 1 ... 8 9 [10]