Keep up to date on the latest tax and accounting news and updates to our firm.
Time is running out to minimize your tax obligation before the end of the year! This month’s newsletter features several tax moves to consider making by December 31st to lessen the amount of money you owe the IRS.
Review the Social Security benefits and their recent changes, plus learn about the greatest, unreported theft in America - and you are a victim! All this and ideas for your business are outlined in this month's newsletter.
Please call if you would like to discuss how this information could impact your situation. If you know someone who could benefit from this newsletter, feel free to send it to them.
There are always moves you can make to reduce your taxable income. Some of these tax-saving moves, however, must be completed by December 31. Here are several to consider:
And you are a victim!
For generations we’ve been taught by our parents to save. Save for a bicycle. Save for college. Save for retirement. And then, in retirement, you could count on this savings to earn interest. Millions of Americans used Certificates of Deposits (CDs) and low risk bonds to ensure they could retire without worry. Think about this...$50,000 in CDs in 1990 earned 8% interest, or $4,164, each year. And a $10,000 balance in your savings account earned 5.5% interest, or $565, each year.
Today that $50,000 earns 0.6% interest, or $301. The other $3,863 is no longer yours! And your bank now only needs $50 to pay you for the use of the $10,000 in your savings account. Where did that money go? Who took it and why aren’t you upset about it?
Your interest income now benefits someone else
The simple truth is your savings interest is being given to those borrowing money in the form of lower interest rates on their loans. You lose your interest income and pave the way so someone can buy a home for lower interest, a business can buy equipment at lower financing rates or so the government can pay low interest rates on their spending in excess of their tax revenue.
In fact, the government’s spending is the elephant in the room. The government cannot afford to pay high interest on their excess spending, so there is tremendous pressure to keep interest rates on these borrowings as low as possible. This policy reverberates through the banks who price their lending on low fed rates.
The message being given
The inadvertent message to savers? Stop saving! Yes, we are taking your money and lending it to someone else. But since our loan rates are so low, we cannot pay you much of anything for the use of your money. So stop saving and go into debt. The interest is so low!
Yes, you are a victim of interest income theft. It is being given to borrowers, especially the government. Here are some ideas to reduce the cost of being a victim of this theft:
Source: Bankrate historic rates for CD’s and deposit account in 1990 and in August 2021, as well as The Buffalo News, April 11, 1990.
Here are some ideas to lower your business taxes, get organized, and to prepare for filing your 2021 tax return.
As 2021 winds down, here are some ideas to consider in order to help manage your small business and prepare for filing your upcoming tax return.