Tax Advice

Santorini by ChellieUpdated insider information by Chellie Campbell, author of “The Wealthy Spirit: Daily Affirmations for Financial Stress Reduction”

148-May 28

“There’s only one thing worse than paying income tax; and that’s not paying it!”—Anonymous


I am not a CPA, nor an enrolled agent. I don’t prepare tax returns, so I am not going to give you specific tax advice. This is just the general news I think everyone needs to know:

  1. Get professional advice. Pay the money. I never had a tax preparer that didn’t save me more money on my taxes than his or her fee cost me. In The Millionaire Next Door, authors Stanley and Danko outline many areas where the typical millionaire saves money, buying second-hand cars, resoling their shoes, etc. “But they are not nearly as price-sensitive when it comes to purchasing investment advice and services, accounting services, tax advice, legal services, medical and dental care for themselves and family members, educational products and homes.” They state that the affluent account for only about 1 percent of the U.S. households, but they pay 25 percent of the tax on personal income. Taxes are the largest expense they have, and they want the best advice they can get on how to reduce that burden. The tax preparer’s fee is even tax-deductible.
  2. Declare all your income and pay the tax on it. Millions of people work at home, have small side businesses, receive extra cash from sources outside their regular work, etc. Sometimes they don’t declare all the income, figuring that no one will ever know about it. But you know. You might fool the IRS, but you cannot fool yourself. And if you know you are doing something dishonest or illegal, which this is, it is going to cost you. It will cost you in stress, in lost sleep, in embarrassment trying to remember what lie you told. Somewhere, somehow, the money you thought you saved or got away with, will be taken from you. Directly or indirectly. Pay what you owe on what you earned. Sleep with a clear conscience. More than what you paid out will come back to you.
  3. Take all the legitimate tax deductions you can. The tax code allows you to take many deductions, exemptions, and credits because it recognizes that it cost you some money to make the money you earned. A small business person spends a lot of money on advertising, supplies, cost of goods sold, equipment, repairs, membership dues, travel, parking, postage, fliers, promotion, insurance, continuing education, etc. There are many, many legitimate costs related to earning income that are tax-deductible. If you’re using the golden phone to send out ships in order to get business, the phone charges are tax-deductible, too. Take every deduction to which you are entitled. Pay what you owe, but don’t pay more than you owe.
  4. Celebrate your payment as a gift. You’ve got to pay for the government anyway, so you might as well do it happily. Choose the line items in your national budget that you approve of, and decide that’s where your money is going. My taxes help pay for library books, the space program, the Small Business Administration, the national parks, and people on welfare who really need help. Where do your tax dollars go?
  5. P.S. It’s highly likely that this book is tax-deductible for you. Check with your advisor!

Today’s Affirmation: “I happily pay my fair share to help my government run efficiently and effectively.”

Marc Weiss gave a great talk at a WRS ( meeting I attended, and I invited him to share some of his information with you here on my blog. Although you may love your work like I do and not necessarily want to retire, you will want to have a retirement account regardless. It feels good when you have savings and investments! You attract more money when you feel rich and prosperous and secure.

Breaking Down Your Retirement

By Marc H. Weiss

Archer Weiss Insurance & Financial Services, Inc.

Telephone: (818) 346-3700

Saving for retirement is often a daunting task.

Sometimes though, breaking big, complex issues – such as saving for retirement – down into more manageable pieces can make all the difference in the world. Here are three basic questions to ask yourself when it comes to your retirement savings. While these are far from the only questions you’ll need to focus on in order to achieve a successful retirement, if you know these answers you’ll have a definite head start.

Question #1 – Am I contributing enough to my retirement accounts?

Retirement accounts, as the name implies, are great places to save money for retirement. The tax-favored nature of these accounts often helps individuals to accumulate far more value than would have been achieved in a taxable account. If you are working and have earned income, you’re most likely able to contribute to some type of retirement account – something you should seriously consider. Making even small contributions consistently over time can add up to big savings down the road.

Am I contributing to the right type of retirement account?

Depending on your age, your income and your employer, you may have access to a variety of retirement account options.  For instance, let’s say you are 50 years old and make $100,000 per year and your employer offers a 401(k) option. In this case, you’d have a number of choices on where to save for retirement on a tax-favored basis.

You could defer a portion of your salary into your 401(k), you could contribute to an IRA or you could contribute to a Roth IRA – in fact, you could even have some combination of all three. What’s the best place? That depends on a number of factors (beyond just your age and income), and is a decision that is best reviewed with a CPA or financial advisor who has specialized knowledge in this area and has a keen understanding of your current financial situation and long-term goals.

Do I have a plan for taking money out of my retirement accounts?

In determining how long your money will last, it’s not just the size of your accounts that matter; it’s the way you distribute the funds from those accounts. Distributions from some accounts, such as a Roth IRA, may be tax-free, while distributions from other types of accounts, such as 401(k)s or IRAs, may trigger significant amounts of income tax.  Determining just how much to take from each account and when to take it can play a major role in helping you achieve your financial objectives.

Marc H. Weiss

Archer Weiss Insurance & Financial Services, Inc.

Telephone: (818) 346-3700

Prosperity is a habit. You have to practice it every day.

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Chellie Campbell is a Financial Stress Reduction® Coach and the author of The Wealthy Spirit, Zero to Zillionaire, and From Worry to Wealthy. She is one of Marci Shimoff's “Happy 100” in her NYT bestseller Happy for No Reason and contributed stories to Jack Canfield’s books You’ve Got to Read This Book! and Life Lessons from Chicken Soup for the Soul. Past president of the LA Chapter NAWBO, she was "Most Inspirational Speaker" by Women in Management and "Speaker of the Year" by the Association of Women Entrepreneurs. She does daily inspirational videos in The Wealthy Spirit Group on Facebook.

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