Traditional IRA: An individual retirement account that allows individuals to contribute pretax money to investments. The investments grow tax-deferred until the amounts are withdrawn at retirement, generally age 59 1/2. The maximum amount you can contribute for 2015 is the lesser of your taxable compensation or $5,500 ($6,500 if you are 50 or older). There […]
Estate Planning Basics
No one wants to think of the inevitable, but there are some basic points regarding estate planning we should all know. There are complex trusts and gifting strategies that can be incorporated, but let’s talk about first things first. Do you have a will? How do you own your assets? Are your beneficiaries updated in […]
What is the Difference Between an LLC, S-Corp, C-Corp, and Sole Proprietor?
Business owners have several choices of how they can operate their business. The decision should be well thought out and be able to meet your objectives. Here are some of the pros and cons of each structure: The easiest form of operating your business is as a sole proprietor. A sole proprietor has a lighter […]
Are You Backing Up Your Data?
Most of us use computers for both our businesses and personal lives. What would happen if the information in our computers was lost or destroyed? Would you lose valuable information to run your business, such as the amounts due from your customers? What about the 1,200 pictures that you took with your phone or digital […]
An Overview of IRS Audits
There are different types of IRS audits. The first and least complex is the correspondence audit, next is the office audit, and lastly and most complex, the field examination. I highly recommend to anyone who receives a letter from the IRS, or even the State of NJ, to contact their tax advisor as soon as […]
Price vs. Value
Understanding the difference between price vs. value will probably save you a lot of headaches, improve your finances, and even your life. To simplify, price is the dollar cost, while value represents the benefits or worth received. Price is very easily measured, and is an okay measure to use when purchasing goods and services of […]
Budgets are Boring
Ever wonder where all of the money went and you just don’t know what you spent it on? You’re not alone, but it’s still not a good thing. Here are a few simple ways to help you to keep track of your money on an individual level. We’ll address businesses in another article. Quicken: You […]
Backwards Tax Planning
The title of this article should really be “Proactive Tax Planning.” Backwards tax planning is what you want to avoid by taking steps to minimize your taxes throughout the year. Steps you should be taking throughout the year include: Businesses: Entity Selection: The entity that you use to operate your business has a very large […]
Ramp Up Your Knowledge with These Books
Reading books can be an extremely effective way of obtaining knowledge. A brand new book can be purchased for $20 or less and even less for a used book or an e-book. If you can borrow a book from the library then it’s free (accept for possible late fees)! Here are some books that can […]
Home Office Deduction Simplified
The home office deduction is used by both small businesses and employees, which allows a deduction for using part of your home exclusively and regularly for business purposes. This allows a percentage of certain expenses to become tax deductible or at least more tax favorable such as mortgage interest, property taxes, rent, utilities, homeowners insurance, […]