“Innocent Spouse Relief for Income Tax Filings”


July 18th, 2013


Once a married couple files a joint tax return, each partner is by law accountable for the full tax liability, regardless if just one of the spouses is accountable for the failure to pay. Referred to as a joint and several liability, this particular legal principle still is applicable following a divorce as well as in cases of misrepresentation or fraud. In past times, the IRS provided Innocent Spouse Relief as a way to protect a spouse who didn’t know or have reason to know that an understated tax existed. Just last year, the IRS introduced a revision of the Innocent Spouse Relief program so that knowledge that the tax return was incorrect is no longer fatal to a claim for relief.


“The Fed is Optimistic While the Markets Dither”


July 10th, 2013


After a great deal of speculation at the beginning of June regarding when the Federal Reserve might let up on its quantitative easing policy, Federal Reserve Chairman Bernanke finally spoke….and the markets overreacted with both stocks and bonds taking a hit in the face of indiscriminate selling.


Chairman Bernanke carefully couched his announcement on June 19, stating that the pull-back is predicted to begin later on this year, and that the Fed will reduce monthly purchases of Treasury securities and mortgage-backed bonds gradually beginning later in 2013 and finishing once the unemployment rate reaches Seven percent (which the Fed projects to be around mid-2014 ). He stressed the fact that the timing of the pull-back will be contingent upon the economy, understanding that if development falters, the central bank would probably slow or even reverse its retreat.




“The Future of Bonds” 

July 8th, 2013

In the second quarter of this year, the yield on the 10-year Treasury bond rose 54 basis points to 2.24 percent in the span of one month. Economists have been predicting the eventual rise in interest rates, but a jump this big over such a short time frame was not expected.


If you own a substantial bond allocation in your portfolio, it’s a good time to reassess what you own – and why. Earlier this year, private industry regulator FINRA (the Financial Industry Regulatory Authority) issued a warning to investors regarding the adverse relationship between bonds and rising interest rates. Since bond prices typically drop when interest rates rise, an outstanding bond – particularly one with a low interest rate and high duration – might experience a significant price drop. This means that bond funds invested primarily in long-term bonds will decline in value.




“Overview of the Tax Provisions in the 2012 American Taxpayer Relief Act”


January 15th, 2013


Dear Clients and Friends,The recently enacted 2012 American Taxpayer Relief Act is a sweeping tax package that includes, among many other items, permanent extension of the Bush-era tax cuts for most taxpayers, revised tax rates on ordinary and capital gain income for high-income individuals, modification of the estate tax, permanent relief from the AMT for individual taxpayers, limits on the deductions and exemptions of high-income individuals, and a host of retroactively resuscitated and extended tax breaks for individual and businesses. Here’s a look at the key elements of the package:


Read the full post


“Year End Fiscal Cliff Tax Strategies”

December 14, 2012


Depending on what, if any, tax legislation Congress is able to enact in the next several weeks, we will likely experience a tax increase for 2013 and later years.  That said, the following are some key strategies that should be considered.


Read the full post


“The Fiscal Cliff”

November 27, 2012

What Exactly Is the Fiscal Cliff?


The fiscal cliff refers to a number of tax hikes and spending cuts that will go into effect on Jan. 1, 2013. If Congress and President Obama do not agree to act on averting this perfect storm of financial disaster, then America will, as the term has been coined, “fall off the cliff.”  The tax increase alone will be more significant than any in the last half century.


“Are Bond Investments Dangerous Right Now?”

September 18, 2012


The short answer is “probably”.  But then again, stock investments are dangerous right now too.  In fact at any given time, there is some level of risk associated with any investment.  It’s the nature of investing.  The trick of course, is to balance that risk with reward and still sleep at night.  That is my job as an investment advisor.  It is also my job to help my clients determine what their level of risk really is.  Risk is a funny thing.  When the stock market is rip roaring, most everyone is willing to take a little more risk than they really should, and when the market is depressed, most are so fearful that little to no level of risk can be tolerated.  Neither of these extremes makes for good investing and my job is to guide clients past the emotional responses to make better decisions.

“The Richest Man in Babylon”

August 20, 2012


“Divide your portion to seven, or even eight, for you do not know what misfortune may occur on the earth.” – Ecclesiastes 11:2


One of the biggest challenges I’ve faced with tax clients over the years, is that so many just live beyond their means.  These are bright, well educated people with successful professions or businesses that make very good livings.  The problem is, they always seem to have inadequate savings, and no cushion for a rainy day.  And certainly, as Ecclesiastes teaches us, no diversification.  Most would tell me they will start putting something more away for retirement “one of these days”.  It’s one of the reasons I added investment advisory services to my practice.  I knew I could help them with some basic rules and near painless financial discipline.


“The Truth About Diversification”


August 17, 2012

Diversification is a method that reduces risk by allocating money in a portfolio among various types of investment categories.  Those categories are known as “asset classes”, and deciding how much to put in to each asset class is known as “asset allocation”.  The rationale behind diversification is that a portfolio of different kinds of investments will generate higher returns with lower risk than one with only a few investments.


“How to Evaluate and Choose Mutual Funds”

August 17, 2012


Many investors today utilize mutual funds as part of their overall investment plan.  Whether you must make your own mutual fund selections for your 401(K) or employer sponsored retirement plan, or use a professional investment advisor for other types of investment accounts, mutual funds can be an effective way to own baskets of stocks or bonds, with a small amount of investment dollars.
“How Much Do You Need To Retire”

August 17, 2012


While there are countless generic retirement calculators available on line, there are several serious limitations to them from a planning standpoint.  First, knowing how much money you will need for retirement is uniquely personal and specific to you and your circumstances, and there is no one size fits all tool to determine your needs.  Second, and more problematic, there is simply no crystal ball that exists to predict the future.  How much will you earn between now and retirement?  How much will you be able to save?  How much will I really need when I retire? What annual inflation rate should I assume before and after retirement?  Will Social Security even exit to help defray my living expenses?  What might happen between now and retirement to derail my plans?


“The Quest For Income”

August 17, 2012


With certificates of deposit, treasury obligations, and money market funds paying all time low rates of interest, safely investing for income seems relatively impossible.  There are a number of reasons for this predicament, not the least of which includes the situation in Europe driving a significant demand for “flight to quality” U.S. based obligations, and the Federal Reserve holding rates artificially low for an extended period of time.

“IRS Audit Triggers”

August 17, 2012


After 34 years as a CPA, providing tax planning advice, preparing thousands of tax returns, and representing numerous clients before the Internal Revenue Service, I’ve pretty much seen it all.  Even though we have just concluded tax season for this year, audits of those returns just filed might take a year to eighteen months to come up in the IRS system for examination.  So let’s talk about what might trigger an audit, and how to protect yourself going forward.