When Uncle Sam’s income (i.e. tax revenue) is less than his spending he runs a budget deficit. The Treasury Department sells Bills, Notes and Bonds (i.e. “Treasuries”) to cover the shortfall. Who are the buyers? Who enables the federal credit card? Historically the gap was filled from overseas. Individuals would buy Treasuries due to [...]
So here we are again. Loathe to comment for fear of legitimizing a non-event yet silence brings accusations of laxity. Woe is us! By now we’re all aware of a two-day slide that knocked 1,300 points off the Dow. Big Media loves it. Article after article. Talking head after talking head. Lots of folks rewriting [...]
According to the Social Security Administration next year’s benefits will increase by 2.8% as the average recipient will see his/her benefit increase by $39/mo. Similarly the maximum Social Security tax will increase by $279 as the “wage base” or the amount of earnings subject to the 6.2% tax will jump from $128,400 in 2018 to [...]
The prevailing narrative is that the Trump tax cuts (which cut the corporate rate from 35% to 21%) have been a boon for shareholders. Companies flush with cash have showered riches on their shareholders through increased dividends and stock repurchases. Is this true? Maybe. In dollar terms it’s certainly true. Spending by S&P 500 companies [...]
The problem with humans is that, well, we're human. It means we're subject to making decisions not in our best interest. We're easily distracted and excitable. We want to believe what we're told. It's a recipe for disaster. The purpose of insurance is to protect against something. Own a car? Great. Buy insurance in case [...]
Notice 2018-58 provides rules that can be relied upon unless and until Treasury issues clarifying rules regarding the following: K-12: Distributions can be used to pay up to $10,000/yr of tuition per beneficiary at an elementary or secondary public, private or religious school. Tuition Refunds: A beneficiary receiving a refund of tuition or other qualified [...]
One of the items getting little attention in the recent round of tax reform is the kiddie tax. Passed by Congress in 1986 to prevent taxpayers from shifting income to their kids (presumably in a lower bracket) the tax raises more than $1 billion per year for Treasury. What is it? The kiddie tax is [...]
A Limited Liability Company (or its cousin the S-Corp) can be a valuable tool for protecting personal assets by separating the entity from its owners for both tax and legal purposes. In doing so a “corporate veil” is created. But just like a properly-insured driver can’t drive with impunity and reckless abandon so too must [...]
Rather than reforming its fiscal policy to incentivize job creation and stem the tide of wealth leaving the state NJ seems intent on covering bullet holes with Band-Aids. Governor Murphy’s latest move to raise taxes will likely prove counterproductive. Contained in the recent budget deal is an increase in the state’s personal income tax from [...]
We all know that guy. Heck, we might be that guy. You know who we're talking about. He’s the guy who solves one problem by creating three even worse problems. Well, that guy is at it again. In an attempt to get around the $10,000 cap on state and local income and property tax deductions [...]