michael

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Posts by michael shelton:

How to choose the right tax advisor

Small business owners and individuals often struggle to find the right professionals. I know I’ve made mistakes with service providers for the business as well as trade specialists at my home. It makes sense. You hire people to do things you don’t do. It’s tough to know who’s right or wrong for your needs. This can be particularly true when trying to figure out how to choose the right tax advisor. Fortunately, there are easy ways to identify a good tax preparer. It’s not just the return preparation fee and current mistakes you need to consider. With the new rapid changes in tax law, there’s a lot more a provider needs to know. You pay the price for poorly completed returns. Auditors will require three years back worth of errors be paid without question. When substantial errors are found, fines, interest, and back taxes owed can be levied on the […]

Hold or sell to find bulls in a bear market?

It’s been a tough couple of months for just about everyone with investments. The traditional advice of not selling during a retraction is starting to hurt. Buying high and selling low defeats the goal of having your money appreciate they say. Bear markets recover to levels higher than prior bull market gains, the assurances go. What we’re seeing today, though, is unprecedented. Hold or sell isn’t as easy a question as it used to be. Fortunately, even in bear markets, there are patterns. Spending behavior is different when the economy is suffering. Doing nothing and depending on dollar cost averaging to save the day might not work with the kind of retractions happening today. The biggest losers Large-cap and high-tech stocks are taking a pounding. The top tech stocks have lost $3 trillion this year in market capitalization. Sure, they were overpriced, but that’s trillion with a “T,” which […]

Do you know what those 401(k)s or IRAs are costing you?

Most people think it’s smart to divert income regularly to an employer sponsored retirement account or an individual IRA. Of course, those folks are miles ahead of the majority of Americans in setting money aside at all, but how you do it can make a big difference come retirement time. I see people losing thousands of dollars every year when they don’t look at tax consequences, especially possible savings, as they make decisions about funding retirement. Diversifying gives you more control with tax liabilities IRAs and 401(k)s are great investment vehicles if they fit your individual situation. Sometimes it makes more sense to maximize your benefit in a brokerage account. This can help reduce your taxes when you have other financial matters to consider with your household. For example, perhaps you had an unusually low-income year. It’s common for small business owners to experience profit ebbs and flows. It might […]

Don’t forget real estate in your net worth

Wealth is defined as an abundance of valuable possessions or money. How much wealth you have is determined by subtracting liabilities from assets. This is also how you calculate your net worth. Have you thought about what that number is lately? It’s probably different than it was before COVID-19 came on the scene. The time we’ve spent in isolation during 2020 has caused most to do a lot of self-reflection. Too much for many of us to be comfortable with. Still, it’s always a good idea to periodically assess where you’re at and where you’re going. Why not spend some of this navel-gazing time doing and in-depth evaluation of your finances? You might be pleasantly surprised at what you discover. Get creative to build wealth I often find, when working with families and business owners to assess their net worth, that real estate is a significant portion of their wealth. Most, though, […]

Choosing right come tax time

Small business owners and individuals often struggle to find the right professionals. I know I’ve made mistakes with service provides for the business as well as trade specialists at my home. It makes sense. You hire people to do things you don’t do. It can be tough to know who’s right or wrong for your needs. Fortunately, there are easy ways to identify a good tax preparer. It’s not just the return preparation fee or mistakes made on current year reporting you need to consider. With the rapid changes in tax law we’ve seen over the past few years, you’ll pay dearly for mistakes made three years back automatically, and six years in cases where substantial errors are found. When price is the pitch, you get what you pay for You’ve probably heard local firm claims they’re cheaper than the big guys. I’ve learned the hard way to be wary […]