We are about to be blasted with endless advertisements that will seek to help you stop smoking and lose weight as it is the time of year for resolutions to be made. It is easy to be cynical about this and their chances of sticking, but it is also easy to see that these resolutions come from a good place and are from people who want to make genuine changes in their lives.

The key to making them work is taking action and doing it quickly. The longer that you put something off, the easier it is to keep putting it off.

Recently, I have talked in this space about how it is more difficult to make financial moves that affect your tax picture as the calendar year winds down. It is really easy to make those plans once the calendar turns, though, and they can feel less dramatic with greater results because they have more time to play out.

But again, you must take action.

I don’t want to spend a lot of time going over any specific plans this week – we will have enough time to do that in the new year, and I know most people are still mentally checked out until all the holidays have passed. But let this be the seed of an idea that can grow.

So think - what is one thing that you would like to change in your financial picture to make 2019 feel better than 2018? It could be as simple and front-of-mind as putting away enough money to make gift buying next holiday season stress-free.  It could be as huge and potentially complicated as increasing your business’s profitability.

Either way, here is to you staying committed to making it happen. But remember you must take action, so make an appointment with us now to start keeping yourself accountable and starting the path to success as soon as possible.

Happy New Year!

It feels difficult to believe that 2018 is almost over. I know everyone says that toward the end of every year, but that feeling has definitely increased around here this time around.

The biggest reason has been the amount of tax changes that have been coming since the passage of the Tax Cuts and Jobs Act. This even continued over the past week or so when we finally saw the final version of the new 1040 form.  And that coming just about a month before you can start to really use it.

So we started the year with many questions, and along the way we got many answers. As we go into the filing season, we are bound to find many more questions, and we will hope that we are given answers.

In such a time of change and upheaval, it is always heartening to have so many clients we work with so closely that trust us to travel the path together. So to all of you out there, thank you.

In such times, as well, it can be even more important to trust in your family and friends. They are the ones who give you the energy to travel that work path. So to all of you out there, thank you.

At this time of year, we celebrate different holidays in different ways. No matter what you do or how you do it, though, let this be a wish that you take the time to embrace who you’re doing it with. Let this be a time when you get to relax and reenergize.

Happy Holidays!

It happens to all of us, even me, as earlier this week, I got click baited.  No one wants to face a tax audit, right? So why wouldn’t you click on an ad that says it will lead you to a list of red flags that could cause the IRS to give your tax return an extra look and potentially trigger an audit.

And I’ll even allow you the chance to give into this impulse by providing you a link to the article here.

This article is from Kiplinger, and although its eye-catching title and slideshow presentation are very clickbait-y, it is not as if the article is full of bad information.  Some of it is even very good, as people should know that the IRS receives copies of your W2s and 1099s, so if you try to not report all of your income, the agency can figure that out without much work.

At the same time, though, I find the idea of red flags that can to an audit kind of misleading.

For instance, another entry on the list is owning your own business, because of how it can open up a sea of potential deductions of which the IRS may want proof. And sure, your business transactions could potentially lead the agency to want to look deeper into your return, but does that mean you should not take deductions to which you’re entitled in the hopes of avoiding an audit?

Of course not.  Instead, I think that the proper mindset to take when doing a tax return is to make sure you are submitting a legitimate one. As long as you do that, you can have as many red flags on it as you want. That will just mean that you are using the system to your best advantage and getting a better return.

This type of mindset may be even more crucial as we head into the first tax return season following the passage of the Tax Cuts and Jobs Act. Are you just assuming that you will now fit into the larger standard deduction and that will essentially sum up your return? Well, that is certainly going to be the case for a number of people, but it’s an assumption that could also lead you to not looking into everything for which you could still qualify and benefit from. And if there are legitimate credits or deductions, don’t you want to use them?

Sure, the more that you do take advantage of those things, the more chances there are that your tax return will look different enough from the norm that the IRS may question it. But why should this be a worry if everything you are doing is legitimate and legal?

As always, we are happy to help you find the best answers for your individual situation. If you want some of those answers before the end of the year, time is starting to run short, but we can still offer appointments before year end.  Even if you don’t look deep into the situation by then, though, we will still be here once we get into 2019 and are again ready to help you with another tax return.

Market Turmoil or Transition?

With the recent market sell-off, many investors have been asking: What is causing this?  Should I get out of stocks completely?  Is there a safe-haven? What they are really asking is: What should I do now?

Passive to Active

In 2007, passive investments represented 26% of the U.S. Stock Market.  Now, in 2018, 83% of investments are passive.  This means that most of the investments are made (in mutual funds, ETFs (Exchange Traded Funds) and by passive managers) without much regard to the fundamentals.  This tends to exacerbate market moves in both directions and causes additional volatility.  We have seen this to the upside, where the FANG stocks (Facebook, Apple, Netflix and Google) have propelled the market higher.  We can now see it to the downside as this can lead to indiscriminate selling, potentially allowing great companies to be sold off for no reason other than their inclusion in an index.

What we need now more than ever is to evaluate companies on their fundamentals and earnings, moving our investments from passive back to active management where the company’s performance is most important.

Overvalued to Undervalued

During these times there is a divergence that occurs from the true value –referred to as the Intrinsic Value, and the current Market Price of an investment. We should look to be buying companies whose market price is currently lower than its intrinsic value.

We have constructed a portfolio to do just that. We suggest moving to this Intrinsic Value Portfolio. It’s easy to see that the fundamentals of such a portfolio will be more resilient in these times and positioned for a higher probability of long-term success.

Get Out Of	Get In To
Overvalued Equities	Undervalued Equities
Fixed Income	Variable Income
Speculative Paper Assets	Defensive Real Assets
Passive Funds and ETFs	Active Management

Let’s get together to discuss how we can transition or rebalance your portfolio to be better able to weather the storm that we are predicting is ahead.

Our work here can sometimes feel over the place – not that this is a bad thing.

In fact, it is one of the parts of my job that I find most interesting. It can be numbing to do the same thing over and over. Here, though, I get to work with many different clients who face many different issues, so helping them always comes in a unique form.

This is something that seems to be hitting many taxpayers as we rush toward the end of 2018. Many people have heard of the some of the tax law changes implemented by the Tax Cuts and Jobs Act, and many used some political calculus to determine how they felt about them. Now, however, they are getting much more interesting in knowing how those changes are going to affect them personally.

As we have said many times, there is not one answer that we can give to cover everyone. Personal answers will be needed. And those personal answers may also change how you go about that political calculus.

So if you need some of that one-on-one attention, please reach out to us BEFORE the calendar turns to 2019.

Now in the interests of continuing to be all over the place, here are a few quick-short items.

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Ohio has become the first state in the nation to start accepting Bitcoin as tax payments from many businesses.

I am not an expert in cryptocurrency, so do not want to give any financial advice on how sound of an investment it is. I would only say that in general the volatility in Bitcoin’s value seen over this year goes to show that one should go into investing in this area with a realization of what kind of risk-reward spectrum you are on.

A move like this by a state, though, only adds legitimacy to the concept and helps the long-range forecast of success for these new currencies.

Maybe this could even lead to us one day understanding just what blockchain is anyway.

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Now I’m not really sure if this time of year opens one up to higher risk of identity theft. There is definitely talk about it, though, as more people make more online transactions during the holiday season.

I am sure, however, that it does always do one good to take common-sense actions to protect your information no matter what the calendar says.  And if your holiday shopping has made you realize that you should be taking some added measures, here is a little primer the IRS recently put out in the spirit of the season.

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Late last week the IRS began an Instagram account. Now sure, I can’t find any real fault in the agency using as many means as it can to reach more people with more timely information, but it was never a platform I imagined was cut out for tax news dissemination.

And no one really wants a heap of tax professional selfies.

Some of us do have some rather cute cats, though …