The tax season without end has finally ended. The deadline of October 15 passed last week for those who got an extension on their taxes. And you know what that means now? There are fewer than three months left until 2021 (yes, we are all that ready to leave 2020 behind that the countdown can begin). And you know what that means now? Time is running short to make some changes to your tax picture for next year.

Just what can you do to make those changes? Well the answer to that depends upon who you are and what you are trying to do. In this year of all years (even if that has been achieved through a horrible ranking), though, I think it is a time when more people than ever should be asking that question.

Through the year’s series of endless debacles, many people are in a different financial situation than is shown on their 2019 tax return. In many cases, this means things have taken an unfortunate turn. It could then be possible to put less away for taxes over the final months of this year and still have fulfilled your tax obligation. In this time of financial stress for many, any chance to get a little more money into your bank account can be of great benefit.

But even for those who have been lucky enough to move in the other direction and are in a better financial situation, you also want to make sure that your tax obligation is being fulfilled. In this year when life have proved it can massively change in littles time, you don’t want to end up in a precarious situation with an unexpected tax bill that you can not afford to pay.

In either case – and really in any case when it comes to your finances – planning and preparation are key. We cannot foresee every twist and turn that life will take. After all, I certainly never expected to be writing an article like this a year ago, trying to help people navigate a struggling economy due to a pandemic would have seem alarmist. Taking action is what helps you get through those times, though. A wait-and-see approach sometimes turns out to be okay, and can even result in favorable outcomes, but why not just know the good outcome is coming? Making moves is a can’t-lose situation because it sets you up in the best possible situation. There is empowerment to be had by doing it, too, and feeling empowered is something that can be difficult to find in this time when so much is out of our hands.

Warmly,

Josh Bousquet
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As I am sure everyone is only all too aware, we are deep in an election season with less than a month to go until votes start being counted for president. As always, the economy ranks high when people are asked what they weigh when deciding their vote, so I thought it was worth spending some space here to go into what a vote for each side could mean in a financial sense.

One of the biggest accomplishments of President Trump’s time in office has been the Tax Cuts and Jobs Act that gave the country’s tax system a large overhaul. This largely shows Trump’s financial outlook and how he prefers to steer the economy. It may be impossible to say that Trump would be able to extend, or even continue, all the cuts in his original plan if reelected, as spending has already greatly increased due to the coronavirus pandemic, with both political parties talking about how further aid will still be needed.

From the other side, though, Joe Biden has already stated that he would plan to raise tax rates on the wealthy (those with an adjusted gross income of more than $400,000). He also has other differences in tax policy beyond the income tax, looking for increases in other areas, as well. If you want to get into deeper details on that, click through to this article from Accounting Today.

On the surface, when only one of two major candidates is running on increasing taxes, that would not seem to bide too well for Biden. The Democrats’ nominee, though, got a rather surprising nod from the financial sector last week, when Goldman Sachs released a note that said if Biden was elected in a ‘blue wave’ that also resulted in Democratic control on Congress, it would likely result in faster economic growth as the country recovers from the pandemic.

This forecast essentially comes down to how that blue wave outcome would allow the Democrats to push through a large fiscal stimulus package to help jumpstart the economy. For even as Republicans also currently work toward something in that area, the packages authored by Democrats promise to be larger. No matter the final numbers, though, getting anything passed would be a boon to the country over the current government impasse. And again, if anyone wants to get deeper into this projection, read this article from Business Insider.

Beyond that, even if you do not care to get any deeper into either of these issues, please read other articles about the issues you care about and read them from multiple sources. We all have instinctual feelings that we want to be true when it comes to politics and the future we hope it brings. There are enough people publishing information out there, that a Google search can uncover an article to back up any of those first-wave feelings. Do not stop there, though, and keep reading. Find pieces written from a nonbiased point of view and find pieces written from the opposite point of view. Only then can we be confident that we are voting in the way we should be, after having weighed various viewpoints and evidence.

Warmly,

Josh Bousquet
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Last week I wrote about the New York Times story concerning President Donald Trump’s taxes, and well, quite a bit has happened since then to push that to the background of the national conversation. In this space, however, we will linger there for one more week.

As I said last week, there was no great revelation of wrongdoing in the report. The issues one could have with it are more with the system than the actions taken within it. What story one extrapolates from there can vary depending on where you want it to go. Does this show someone who is not a strong businessman, has racked up continuous losses, and now stands on the verge of everything bursting? Does this show someone who knows how to work the system and has his money going in the right directions so that he pays as little in income tax as possible while keeping a strong overall portfolio?

There is probably a real answer somewhere between the two, but we do not have any actual financials from the president and were not sitting in any board rooms when decisions were made. Without that information, it is very possible that what appears to be a giant loss in some aspect of business could have been a strategic plan to offset numbers somewhere else.

Either way, there are good lessons that can be taken from this situation. First, this shows the importance of good tax planning. Trump’s tax returns did not come together by looking at the numbers once at the end of the year when it came time to file. They happened because of many willful actions. And sure, most people do not have the means to make THAT many moves, but there is always something to be done to your advantage.

Another lesson is how much you need to make a business plan that fits your needs and goals. I mean, Trump has had a level of success in business that is more than minimal and undeniable. What he has accomplished did not happen by pure accident. Again, there is room in the story for mistakes to have been made, but it also seems he is doing a lot of what he wants to be doing in the way he wants to do it.

Business owners should make choices that fit the vision they have for where they want to go. Working within the system to get the results you want is how you get to the pinnacle of success – you just have to decide what you want your pinnacle to be. One way to get there is to surround yourself with those that can help you accomplish those goals and share in your vision. So if there is anything we can do facilitate your journey, let us know.

Warmly,

Josh Bousquet
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It took about four years, but we finally some information about what exists on President Donald Trump’s tax returns. I hope to be able to give more a tax layout of what the findings are without making it a political issue. With that being said, it is difficult to make it reflect too positively on the president.

For example, the headline takeaway is how Trump paid no federal income taxes in 10 of 15 years and only paid $750 In both 2016 and 2017 as he ran a presidential campaign and then assumed the country’s highest office. This isn’t due to anything shady or illegal but doesn’t sit well with many when someone who is involved in businesses moving around vast sums of money is experiencing business losses that are big enough to offset income to that degree.

When someone earing $20,000 a year is paying approximately the same amount of federal income tax as the president, it is understandable how something seems off.

But is that fair? Well, that depends on one’s economic view. Some have a view that large businesses and wealthy individuals deserve breaks and that money saved will then trickle down to others. Others believe that those people should be forced to give up a greater deal of their money through direct taxes. No matter what side you are on, remember we are in an election cycle where you can vote to try to move these issues in one direction or the other.

For regardless of how you feel about the expenditures of Trump’s that are getting the most attention (haircuts, payments to his daughter, etc.), the New York Time story that broke the numbers does not accuse him of anything illegal in how the returns were filed. It is difficult to fault anyone for operating within the system they are given. You can disagree with the system, but there is really no fault for utilizing it legally.

This is a big story and everyone owes it to themselves to give the information a real read instead of just accepting headline clips and bits. It is enlightening on both the tax system and the man who used it. Principled stands can be had on either side of the issue. I simply urge people to actually have principles on which to stand.

To close, this is also an example of how tax planning can benefit someone. One may not have the assets that Trump does to leverage in the ways that he does, but nearly everyone has something they can do to improve their situation when it comes time to file taxes. The system can be flawed, but is it then a flaw to use it to your advantage? 

Warmly,

Josh Bousquet
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Remember back in July when you got an extension to file your taxes and October felt so far away? Time has been all out of whack for most of the year, right? Three months was SO much time. Well, we reach that 10th month next week, so it is time to start to get things ready to fill out your return and get it filed.

That means that now it is time for the regular spiel when it comes to the tax extension deadline. And it starts with, what are you waiting for? If you are expecting a refund, wouldn’t it be nicer to have it in your pocket than letting the government hold onto your money? If you are expecting to have to pay, wouldn’t’ it be better to get that under control and stop having to worry about it? Furthermore, if you are in that situation of having to pay, remember that your extension was only an extension to file, not an extension to pay any taxes owed, so you are probably already gathering penalties and interest that also must be paid. The quicker you get on those, the less they can be.

That deadline is rapidly approaching, but there is deadline news all over the place and it feels like it pulls in many directions, again like the rest of this year.

For instance, for those who had to file on September 15 and missed that deadline, it’s possible that penalties for late filing could be avoided by writing “COVID-19” across the top of the tax return. This is not necessarily a hard and fast rule, but communication with the IRS indicates that those who are making good-faith efforts to file in a difficult time could received some forgiveness. (Read more about that here).

Now, will this also carry over to individuals who will be filing on the October 15 deadline? It seems to be setting a precedent that there are some situations where that could be the case, but again, that is not set in stone, so I recommend still making all possible efforts to get it done on time.

But of course, this banner year of 2020 could not be satisfied with just a pandemic, so it has also thrown the wildfires at many on the west coast. There, the IRS has offered some concrete help, extending many deadlines for three more months. If you want more information on that, you can read the agency’s news release here.

Beyond immediate deadline talk, though, is just filing taxes for next year, too, which is just another few months away for starting, so I wanted to include a final link that could have meaning in that period. There you can see what the new Form 1099-NEC will look like for those who receive nonemployee compensation as part of their income (largely those who earn income as a contractor and not an employee). This is a new form this coming year and will
replace the 1099-MISC form for many.

Warmly,

Josh Bousquet
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