Should I invest in individual stocks or mutual funds? Unless you are a seasoned veteran, it’s better to invest in pooled funds than individual stocks. There’s danger in picking stocks in your first years because stock prices rise and dive and create tension that you should avoid. Trading stocks should be fun, exciting. Pooled funds…
MORE than half of Americans have stocks in their portfolio. If you don’t, you are missing out. Actually, you have been missing out big time. Conservative people keep their money in Certificates Of Deposit (CD). Conservatism is noble but earning 1% – 2% in a savings account is kind of silly when stock investors earn…
WHILE nearly all articles relate to change, let’s depart from that norm and discuss a few deductions that won’t change. 1. Student loan interest deduction: The Tax Cuts and Jobs Act (TCJA) allows student loan borrowers to deduct up to $2,500 on the interest paid for student loans every year. Student loan interest is interest you pay…
THE Tax Cuts and Jobs Act (“Act”) makes changes to the general business credit by adding a new Paid Family And Medical Leave Credit and changing the Rehabilitation Credit and the Orphan Drug Credit. 1. Paid family and medical leave credit: The Act introduces a new component credit for paid family and medical leave which…
OTHER rules for real property depreciation: If placed in service after 2017, qualified improvement property, in addition to no longer qualifying for bonus depreciation and being newly eligible as section 179 property, has a 15-year depreciation period (rather than the usual 39 year period for non-residential buildings). Apartment buildings and other residential rental buildings placed…
Part 1 of 2 The Tax Cuts and Jobs Act TCJA (“New Law”) effectively lowered the cost of acquiring capital assets by making substantial changes to the income tax rules for bonus depreciation and other “cost recovery” provisions. Bonus depreciation: Under Old Law, taxpayers were allowed to deduct 50% of the cost of most new…
Look-through rule on sale of partnership interest: Under the Act, gain or loss on the sale of a partnership interest is effectively connected with a U.S. business to the extent the selling partner would have had effectively connected gain or loss had the partnership sold all of its assets on the date of sale. Such…
(Part 1 of 2) THE Tax Cuts and Jobs Act (the “Act”) makes major changes to the taxation of partnerships, S corporations, and pass-through income. Most of these changes are effective starting in 2018 (for this 2019 tax filing season). 1. Partnership loss limitation rule: Old law mandated that a partner can only deduct his…
THE Tax Cuts and Jobs Act (“Act”) makes changes to the general business credit by adding a new Paid Family And Medical Leave Credit and changing the Rehabilitation Credit and the Orphan Drug Credit. 1. Paid Family And Medical Leave Credit: The Act introduces a new component credit for paid family and medical leave which…
Estate and gift tax exemption: The Tax Cuts and Jobs Act (the “Act”) increased exemptions (nice) for estates and gifts to $11.2 million ($22.4 million for married couples). Before tax reform, few estates were subject to the estate tax, which applies to the transfer of property after someone dies. Now, even fewer people have to deal…
WHILE nearly all articles relate to change, let’s depart from that norm and discuss a few deductions that won’t change. 1. Student Loan Interest Deduction: The Tax Cuts and Jobs Act (TCJA) allows student loan borrowers to deduct up to $2,500 on the interest paid for student loans every year. Student loan interest is interest you pay…
GENE3RALLY, you may deduct casualty and theft losses relating to your home, household items, and vehicles on your federal income tax return. What used to be deductible under old law has been suspended (meaning not deductible for the current year) with the exception of federally declared disasters. Old law: Under old rules, you were able…
THERE are two types of income tax – regular tax that you are familiar with, and an Alternative Minimum Tax (AMT) that you may not have encountered. If you had experienced a bout with AMT, you’d not forget it. It hurts like a Pacquiao punch to your gut. What exactly is AMT? AMT is a…
* * * Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California. * * * He has 50 years of experience in defending…
APRIL 15 is an annual anniversary of sort – tax deadline for some, a date to file extensions for most. It has become a habit for those who procrastinate like you. I see the same taxpayers come to my office to file after April 15 year after year. It’s against their religion to break tradition….
QUALIFIED tuition plans (referred to as Section 529 plans) are established to help families save for college education in a tax-advantage way. These plans are sponsored by states, state agencies, and educational institutions and are authorized by Section 529 of the Internal Revenue Code. They are designed to encourage saving for future education costs. Funds are contributed and…
1. Changes to the kiddie tax: The Tax Cuts and Jobs Act (“Act”) simplifies the old convoluted computations using tax data of other taxpayers – parents and siblings. The kiddie tax applies to children under age 19 and college students under age 24 who have unearned income over $2,100. Unearned income can means dividends, capital…
1. Personal exemption eliminated: The Tax Cuts and Jobs Act (Act) eliminated personal exemption deductions for yourself, your spouse, or your dependents beginning with your 2018 tax returns (to be filed in 2019). 2. Standard deduction increases: The standard deduction amount nearly doubles for all filers for 2018 to $12,000 for single and married filing separately, $24,000…
1. Mortgage Interest: The Tax Cuts and Jobs Act (TCJA) limits mortgage interest on loans used to acquire a principal residence and a second home debts up to $750,000 (down from $1 million) starting with loans taken out in 2018. The Act eliminates deduction for interest on home equity loans, regardless of when the debt…
Old law: Under old rules, you were able deduct interest on $1 million ($500K for married filing separately) of mortgage debt used to acquire your principal residence and a second home (acquisition debt). You were also able to deduct interest on home equity debt. Home equity loan did not have to be used to acquire…
1. Tax rates The Tax Cuts and Jobs Act (Act) reduces tax rates to seven lower tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top rate was reduced from 39.6% to 37%. The rates applicable to net capital gains and qualified dividends were not changed. Kiddie tax rules were simplified by using…
ADJUSTMENTS to income (referred to as “above the line deductions”) are deductions to arrive at Adjusted Gross Income (AGI). These expenses reduce your income directly without going through itemized deductions. The amount after deducting these expenses is your Adjusted Gross Income. These amounts go straight to your Form 1040 as opposed to itemized deductions on Schedule A. That means…
What is an ABLE Account? The word “ABLE” stands f3or Achieving a Better Life Experience Act. An ABLE account is a tax-advantaged savings vehicle that can be established for a designated beneficiary who is disabled. The Internal Revenue Service released proposed regulations implementing a new federal law authorizing states to offer specially-designed tax-favored ABLE accounts to people who become…
THE Tax Cuts and Jobs Act (TCJA) made changes to the tax treatment of divorces and legal separations in 2019 and beyond. Current rules: Under current rules, an individual who pays alimony can deduct alimony or separate maintenance payments. On the other hand, your beloved ex-spouse must have to report and pay tax on alimony…
IF you plan to trade stocks, it helps to get an understanding of basic terms that are mentioned frequently on TV, radio, and social media. There are three major indices: • Dow Jones Industrial Average • S&P 500 • Nasdaq Composite 1. Dow Jones Industrial Average is the oldest index, dating back to 1896. It…
Allow Your Emotions to Drive Your Trades: Remember the internet dot-com bubble in the 1990s? Many of these companies lacked fundamentals. Investors, afraid of missing out, joined the buying frenzy. And lost. Malo. What to do: Take emotions out of the equation when buying or selling stocks. Don’t fall in love with a stock. Don’t…
(Part 1 of 4) LISTEN to friends and neighbors: Your friend had just hit the big time with a red-hot stock tip. This is big money. Mucho dinero. You follow suit and buy this random stock on impulse. There are some problems here. First, your friend is probably not telling you the whole story. Yes,…
LET’S learn some tips from the greatest investor of all time – Warren Buffet, the Oracle of Omaha. 1. Be greedy when others are fearful and fearful when others are greedy. • Buffett offered this advice during the recession in 2008. • At that time, stocks were plummeting which he said was the best time…
(THIS is a continuation of Part 1 from last week’s weekend edition of Asian Journal) Multi-billionaire Warren Buffett lives simply and adheres to basic but savvy investment principles. 6. Buy companies cheap • Warren Buffett is value investor. • He calculates an intrinsic value by examining what similar companies sell for. • He calculates the…
WARREN Buffett became one of the world’s richest people by adhering to simple doctrines. Let’s learn from his simple living and savvy investing. 1. Be frugal • Multi-billionaire Warren Buffet lives in a modest house. • He has lived in the same humble house for the last 50 years. • He does not have a…
