Wednesday, October 7, 2015
Monday, December 22, 2014
Monday, November 3, 2014
End-of-Year Mutual Fund Considerations
- Ascertain the record date and distribution amount from the fund before buying shares late in the year. If the distribution amount is more than de minimus, wait until the ex-dividend date to make your purchase.
- Before the record date, sell shares that are priced below your acquisition cost. You can take a loss on those shares and avoid the capital gains distribution on them.
- If you are an index trader, consider using index ETFs instead of index mutual funds. ETFs follow special procedures, called the creation/redemption mechanism, mainly to ensure that the share price is kept very close to the share net asset value. However, another benefit of this mechanism is that it frequently allows the ETF to shed profitable shares tax-free. Some index ETFs haven't paid capital gain distributions in years. Another factor for active traders: you can sell ETF shares at any time -- open-end mutual fund companies sell and redeem share after trading hours. Therefore, ETFs are more suitable to active traders, especially day traders.
- Because most mutual fund shares are held for investment, it makes sense to park those shares in an IRA or other non-taxable account. If you use a Roth account and follow the rules, you can avoid taxes on all withdrawals.
- Most stock dividends qualify for capital gains rates, and that includes stock dividend distributions from mutual funds. However, any distribution of stock dividends you receive from mutual fund shares that you hold for investment will be subject to ordinary tax rates if you fail to hold those shares for at least 61 days surrounding the ex-dividend date.
Thursday, October 30, 2014
Tax Selling
Tax Bracket
|
Over
|
To
|
Capital Gains Rate
|
10%
|
$0
|
$9,075
|
0%
|
15%
|
$9,075
|
$36,900
|
0%
|
25%
|
$36,900
|
$89,350
|
15%
|
28%
|
$89,350
|
$186,350
|
15%
|
33%
|
$186,350
|
$405,100
|
15%
|
35%
|
$405,100
|
$406,750
|
15%
|
39.60%
|
$406,750
|
|
20%
|
Thursday, October 23, 2014
The Medicare Tax and Active Traders
Monday, October 20, 2014
Monday, October 6, 2014
Traders' Exemption From Wash Sale Rules
Tuesday, September 30, 2014
Friday, April 5, 2013
Traders Taxed at Unfair Rate?
I see in an article today that Obama is expected to re-suggest a cap of 28% on the value of a deduction for rich people making over $100k a year. He feels it is 'unfair' that someone in the 39.6% tax bracket to actually get a deduction valued at that rate rather than at 28% like someone in the 28% tax bracket would get. Maybe I am missing something but is it only worth 39.6% because they are taxed at 39.6% rather than the 28% bracket. Suggestion: Lower the tax bracket to 28% then the rich would only get a 28% value like everyone else. Then we all can agree that a given tax deduction is worth the same for everyone. Then rich people would not be getting an unfair advantage. BTW - when did the definition of a rich person get lowered to $100,000 from say $1 million dollars like it was many moons ago. Should not the definition be going up with inflation?
Posted by Gary at 11:27 AM 0 comments
Labels: Obama, tax deductions, taxes
DiggIt Add to Del.icio.us TechnoratiTrader Tax Freedom Day
It appears that April 18th will be the so-called Tax Freedom Day this year. The average tax source walking the street on that day will feel a shutter then some relief because they will have earned enough to pay their 'fair' share of the federal, state and local 'investment' in society. It was April 13th last year - so in breathing days that is almost a 5% increase. Thought for the day: Has your value received from your elected officials and governmental employees increased by 5% over last year? Thinking that is not too bad? Well, if the borrowed debt that you should pay, rather than your kids will pay, is included then Tax Freedom Day would occur on May 9th. That extra 21 days would make the increase over 25% from last year. In 1945 while World War II was raging, Tax Freedom Day occurred on May 12th. So in a time of peace we are spending as much as we did on a world war. Some thoughts: Are we now spending more in taxes than on necessities such as food, clothing, and housing? Will we be classified as surfs once the effective date approaches the 50% mark, i.e. July 1st. Will we need to rename the national holiday of July 4th to Dependence Day?
Thursday, July 19, 2012
What do Day Traders Do?
Wednesday, July 11, 2012
Understanding Personal Property Limits For Home Owner’s or Renter’s Insurance
Tuesday, July 3, 2012
Survey finds working from home desired by many office workers
Thursday, June 28, 2012
Organizing a home office
Tuesday, June 26, 2012
Requirements for successful self-employment
Running a business from home as a self-employed individual requires a number of qualities for success.
Starting a business from the beginning and keeping it operational over time is a challenge. A large percentage of startups fail. For those who are self-employed and do not have employees working for them, there is one less challenge, at least. They do not need to concern themselves with managing other people, recruiting them, paying them and all the various tasks associated with having employees. Human resource laws and regulations alone constitute a significant investment of time as small business owners need to learn about them. There is a trade-off for the self-employed, however. They must be able to run their entire business personally. It may be helpful to supplement personal expertise and abilities by hiring professional assistance with specific tasks, such as accounting. When first starting a business, professional assistance might help with tasks such as registering the business name, deciding what kind of corporation to form and taking the proper steps to create it. Traders might want to form a C-corporation or limited liability corporation, depending on their circumstances. Business tasks for the individual There will likely be many things they must do themselves. Entrepreneurs may need to make decisions about equipment and software, set up their offices, talk to clients and do research on their chosen fields. Those in the day trading business will need to develop a method of choosing investments and tracking their profits and losses, for example. They may find themselves performing a significant amount of research into possible trades and dealing with the tax and accounting aspects of trading. |
Wednesday, June 20, 2012
Meeting the challenges associated with working at home
Monday, June 18, 2012
Handling home businesses post-recession
Those running a home based business may be struggling to meet the challenges they face in recent years, during the economic recession and slow recovery.
Expert Jim Muehlhausen told Home Business Magazine that there are several things small business owners should keep in mind. One is to avoid dramatic changes. While the volatility and difficulties of the economy may encourage many self-employed Americans and small business owners to implement major changes in how they operate, he warned that it is generally a better idea to focus on business fundamentals.
Quickly-changing economic conditions are likely not as important to business success as operating efficiently and constructing a sound business model, the expert suggests. Paying too much attention to the broader economy may actually distract a business owner from more pressing concerns that he or she should be focusing on.
If business is slow or exceptionally difficult, it may also be a good opportunity to plan further ahead. There may be more time to devote to that sort of activity at the moment, and the business may perform better in the long run if it is prepared to act in a more fully recovered economy.
In the day trading business, this advice might mean avoiding any abrupt changes to trading strategies. Suddenly accelerating or slowing the pace of trades might be such an alteration, with potentially damaging consequences.
Thursday, June 14, 2012
Balancing family and the home office
Parents who are running a business at home may need to deal with a few additional challenges that other small business owners and self-employed Americans do not face.
Operating individually or running a small business takes up a significant amount of time. This is particularly true in the early years, when procedures and practices are still being developed and established. While individuals may have some ability to set their own hours, they may also find themselves working longer than they expected or otherwise altering their schedule to suit the job.
Those in the day trading business might want to ensure they are aware of breaking financial and economic news at certain times in order to act on time-sensitive opportunities as quickly as possible. If children are at school or otherwise out of the house at convenient times, then there may be no problem. If it is during the summer or children are home, however, then it may be more challenging to balance work and family.
It may be helpful to explain the work being done at times, although the extent must be tailored to their level of interest and age. Talking about the work and the business can be educational and even enjoyable for kids, experts told the Wall Street Journal. At the same time, however, there should be a clear boundary between work-time and family-time.
That can be hard to define when working at home. Having a dedicated office, setting regular hours and other steps that establish a routine can help. This can also reduce stress on the individual, providing a clear period for relaxation.
Thursday, June 7, 2012
Small business owners confront stress, financial challenges
Running a small business is three times more stressful than raising children, according to a new report.
Small business owners frequently give up free time, exercise and other priorities in order to devote more energy and time to their business. The combination of effort and importance businesses typically involve for their owners also makes them more stressful than personal relationships or personal finances, according to Bank of America's first Small Business Owner Report.
"We know how much small business owners give up to make their businesses successful, but despite their sacrifices, they are still optimistic about the future," said one executive. "Therefore, we believe that the financial services industry, the business community and the general public must continue to take steps to support the growth and success of our small business sector."
The country's small business owners typically underutilize some financial tools, despite the fact that they consider financial advice a valuable asset. Those running a home based business may find that financial expertise can be just as helpful as it is for brick-and-mortar operators.
Because of their limited size and expertise, small businesses often lack the internal resources to handle a number of financial matters, such as keeping track of relevant tax provisions and accounting rules. Consulting an expert can significantly enhance a business' ability to run profitably. This is particularly true for the financially-focused day trading business.
Wednesday, May 30, 2012
Traders can take advantage of National Small Business Week to learn, improve their business
As National Small Business Week continues, government agencies and small business organizations are holding conferences, seminars and other events across the country.Networking events, forums and more represent opportunities for small business owners and self-employed Americans to learn from experts and their peers, developing their businesses into more effective, efficient ones as a result, according to the Washington Post. For example, the Small Business Development Center at the University of Central Florida is holding workshops in Orlando to cover government-related small business opportunities, while The New York City Department of Small Business Services holds one which concerns marketing.Those in the day trading business may not be in need of marketing help, specifically, but events cover a variety of topics. It may be possible to learn a great deal from others with experience running a business at home, even if they work in different fields.Day traders have to deal with many of the same concerns as those in other businesses, such as identifying and purchasing any equipment, software and other tools they need and ensuring that their records are backed up properly. It may be helpful to have an off-site backup in the event a flood or fire occurs, since accidents and natural disasters can set a business back a great deal. Losing time may be particularly problematic in day trading, since the profession depends on up-to-date knowledge and quick action.
Friday, May 25, 2012
Work planning when working from home
While trading from home may seem like a perfect solution that will allow for plenty of time to spend with children while also getting your deals done, ParentingSquad reports that it's very important to set up boundaries between work and personal lives.
First of all, it's important that everyone in the family is aware of what's going on, so children know that there are times when parents shouldn't be disturbed for minor issues or play requests. While it's not necessary to completely ignore them all day, they shouldn't be interrupting work consistently.
One of the main ways to make running a business at home more feasible is to have a clear area devoted to work, and keep it separate from other parts of the house. Using a room divider - or having a trading area in a dedicated room - can help create boundaries that children can understand.
The site adds that it's important to stay on task while working from home. While it may seem tempting to complete chores such as laundry or other errands during the day, this will only prolong the time spent online at the end of the day.
However, it is also important to balance that work-oriented mindset with the idea of taking breaks throughout the day, like a person would if they were working at any office. Taking a short lunch and coffee break can help traders keep their minds fresh and avoid burnout during the day.
Tuesday, May 15, 2012
Taking tax deductions for a home-based business
When day trading from home, many of the same business tax deductions are available. Some people may already know about and use the home office deduction, which is available to Americans who have a room used exclusively as their main place of work.Having such an office can qualify a self-employed individual, small business owner or even employee for several benefits, although employees may receive the least advantage from the deduction. This tax break may apply to mortgage interest, rent, utility costs and possibly even insurance. How much each individual can save depends on the size of the office and how much of the home it takes up, measured by square footage.This deduction has the potential to be abused, so it is possible that taking it will increase the likelihood of coming under IRS scrutiny. As a result, some say it is unwise to claim it unless an accounting and tax firm or professional has evaluated the situation. It may also be possible to deduct some of the cost of home repairs or other projects localized to the office itself.Aside from the space itself and related expenses, a day trading business run from home can deduct the same sort of equipment run from an office. This includes office supplies such as paper, printer ink, and a computer for online stock trading.
Friday, May 11, 2012
Americans should adjust financial plans, preparations
The commonly-cited accounting tip that households should try to amass an emergency fund that amounts to three-to-six months' worth of living expenses may be obsolete, experts say.While many financial planners and professionals have referred to this rule of thumb in the past, some think it may no longer be enough, according to the Wall Street Journal. This is partly because many people, when saving in their rainy-day funds, fail to take into account higher prices for necessities like gas and food. Another common issue is that households may forget to update their plans after life-changing events such as marriage, buying a home or having a child. Such major changes of circumstance require financial adjustments as well, experts say, but people often forget to make them. For example, it is generally wise to update estate tax planning after such events.As far as planning an emergency fund goes, Americans may want to meet a goal of setting aside nine months' or even a year's worth of living expenses. The change is partly because unemployment is lasting longer, an average of 40 weeks. Additionally, homeowners may no longer be able to turn to a home-equity line of credit in emergencies, the news source notes, with tighter lending standards.People may also fail to take inflation into account when contributing to their own emergency funds, which could lead them to overestimate how far those savings will go in an emergency.
Thursday, May 3, 2012
Tax cuts may not have the desired effect, expert warns
The argument that reducing taxes will be beneficial for employment and the economy is flawed, according to former policy advisor Bruce Bartlett.
While tax cuts may reduce unemployment under the proper circumstances by making it cheaper for employers to hire workers at a given salary level, such an approach is unlikely to be effective under current economic circumstances, Bartlett argues. The federal government has not implemented a major tax increase on workers since 1983, he states, while it has passed a variety of tax breaks including the recent making-work-pay tax credit and subsequent payroll tax cut.
This examination of history suggests that low employment is not currently being caused by and cannot be repaired by changes to tax policy, according to Bartlett. This analysis is supported by Congressional Budget Office reports that federal revenues currently account for a historically low percentage of GDP.
It is possible that one reason changes to the tax code have not been effective in stimulating employment growth is because so many provisions passed by lawmakers are temporary. Recent changes have often been designed to last as few as one or two years, and businesses may be reluctant or unwilling to make plans around such provisions when they could disappear so soon, Bartlett notes. In that case, tax reform may have to take a longer view to have any clear effect.
This suggests that tax cuts could lower revenue without significant benefit, if Bartlett is correct. Given the government's current financial situation, that could end up encouraging or even forcing lawmakers to adopt higher taxes in the long run, adding momentum to the pushes for higher capital gains taxes and other changes which negatively impact day traders.
Thursday, April 26, 2012
Proposed law may give IRS ability to stop international travel in some cases
The Internal Revenue Service may gain the right to prevent seriously delinquent taxpayers from leaving the country beginning in 2013.The Senate recently passed legislation including a provision that would let the agency deny, revoke or limit the passports of Americans who owe $50,000 or more in back taxes to the federal government, according to TIME. Some members of the House of Representatives object to the proposed law, saying that it violates the right to due process because no judicial proceedings of any kind are required.Action could be taken against people regardless of whether they have been accused or convicted of tax evasion, fraud or a similar offense. The IRS would have to file a lien or assess a levy for outstanding balance. For any taxpayer who has been the subject of such a filing, however, the agency could then contact the passport office and have their right to travel suspended.There would be some exceptions, applying to those who need to leave the country for humanitarian reasons or an emergency situation. People who have set up a payment plan or are disputing the debt may also be exempt.Day traders and other taxpayers who travel abroad or wish to may want to keep an eye on the law. In the long-term, its passage could be followed at some point by changes to the amount that must be owed in order to qualify, although many Americans are unlikely to be affected given the level of tax debt required for eligibility as the provision is currently written. Proponents say people who owe that much are a serious flight risk.
Tuesday, April 24, 2012
Jackass Investing: Don’t do it. Profit from it.
Mike Dever will outline an alternative approach to diversification, which is quite different from conventional investment wisdom. Mike’s approach replaces asset classes with return drivers and trading strategies. As Mike will explain, asset classes are simply long-only trading strategies that do not attempt to isolate their many separate return drivers. To be properly diversified, a portfolio must distribute risk across numerous return drivers. When people limit their investment options to traditional asset classes, they are unable to create a truly diversified portfolio. By diversifying outside this constraint, they are able to achieve a FREE Lunch which is a portfolio that earns greater returns with less risk than a conventionally-diversified portfolio. Once viewed in this fashion it is easy to create a truly diversified portfolio, rather than one constrained by the shackles of asset classes. Diversification is the one true FREE Lunch of investing, but it must be true portfolio diversification, as described in Jackass Investing. It's amazing how logical this approach is yet so few people actually embrace it.
Mike Dever is the author of Jackass Investing: Don’t do it. Profit from It, which is the Amazon Kindle #1 bestseller in the mutual fund and futures categories. The concepts in the book have been developed by Mike based on 30 years of experience in investment research and asset management. In addition to being a successful author, Mike is also the founder and CEO of Brandywine Asset Management, Inc., an investment management firm founded in 1982. Brandywine's investment philosophy is based on the belief that the most consistent and persistent investment returns across a variety of market environments are best achieved by combining multiple uncorrelated trading strategies (each designed to profit from a logical, distinct return driver into a truly diversified investment portfolio.
Register for this event by clicking the following link. Remember all start times are Eastern Standard Time.https://www1.gotomeeting.com/register/604406993
Monday, April 23, 2012
Wednesday, April 18, 2012
Identity theft a growing problem
Identity theft a growing problem
Thursday, April 05, 2012 5:33:13 PM Issue Codes
Regulatory Information
More than 460,000 taxpayers have been subjected to either identity theft or wage tax fraud, according to the IRS. About 260,000 fraudulent filings were found in 2011 alone.Agency data shows the number of cases almost tripling from 2009 to 2011 as criminals and fraudsters seeks to exploit the tax system. Many do so by filing false returns in the name of genuine taxpayers and then collecting the refund. The total cost to the government and taxpayers as the problem grows is in the billions, according to the Newark Advocate.Those expenses may be in the form of lost refunds, time and resources spent attempting to detect and prevent fraud, developing and implementing changes to IRS systems and practices or other losses of revenue and government spending.
Taxpayers may learn their names and social security numbers have been appropriated for fraud when they file their own returns and find them rejected or processing takes extra time. Law enforcement officers note that identity theft can be lucrative, with some criminals profitably selling stolen personal and financial information to others. Part of the problem, some experts suggest, is the emphasis currently placed on efficient and quick processing of returns. This unfortunately allows a quick turnaround time on fraud and makes it possible for crooks to file falsely in someone's name before that person sends in his or her own documents.
While day traders may be more concerned with capital gains taxes than income and wages, the risks to their personal financial information are similar. Those employing tax preparation services or accounting professionals should ensure they are dealing with reputable firms.
See how Traders Accounting can help.
Monday, April 2, 2012
Considerations when e-filing tax returns
Filing an electronic tax return early can have significant advantages, according to some experts.
Once it is filed, the individual receives immediate confirmation of its receipt and acceptance by the IRS. If not, then the taxpayer may have been impersonated for purposes of fraud, and learning that right away leaves more time to correct any problems. Payment can be held until a later time closer to the due date, certified public accountant Marshall Hunt told the Belleville News Democrat.
With fraudulent schemes, audits and other potential complications that can arise, experts and the IRS alike warn that taxpayers should be careful when selecting a source of accounting tips or choosing an accounting or tax firm to assist them. While scams commonly target seniors, they may victimize anyone whose personal financial information can be accessed.
When filing returns and preparing for potential questions from the IRS, experts note that it is important to have all documentation. This may include business receipts, medical bills, corroboration of charitable deductions by the recipient, bank account information and returns from prior years, among other items.
When e-filing, acknowledgement of the return generally arrives within 48 hours of sending it in, CBS Money Watch notes. If notification has not been received at that point, then it may be a sign that there is an issue of some kind, or that the IRS has yet to receive the document.
Audit focus shifting
The rate at which the Internal Revenue Service audits Americans with more than $10 million in income increased to nearly 30 percent in 2011, compared to 18 percent in 2010.
Similarly, 12 percent of those with incomes between $1 million and $5 million were audited, up from 7 percent the previous year. The IRS has been turning more of its attention to scrutinizing the wealthy as it seeks to target Americans who shelter income abroad and employ other tax dodges. The agency investigated the tax situations of 21 percent of people with incomes between $5 million and $10 million, showing that the percentage increases as incomes do.
When looked at as a whole, IRS documents reveal that only about 1.1 percent of taxpayers were audited in 2011, close to the previous year's percentage. Experts suggest that the changes in focus are motivated by a desire to maximize efficiency and revenues, CNN Money reports. Auditing high earners tends to gather more for the federal government. Experts note that returns typically become more complicated for those who earn more, making mistakes increasingly likely and creating additional opportunities for confusion, discrepancies and questions to arise.
These individuals are more likely to have different income sources and types of accounts, as well as to itemize deductions and take various tax breaks. Those in the middle-income spectrum are the least likely to be audited, according to the IRS data, while Americans who report no adjusted gross income or who make less than $25,000 are actually more likely to be the subject of an audit in comparison. Day traders may find themselves more likely than average to be scrutinized, since their income can stand out from more typical wage-earning.