Russ Victor’s Four Keys To Focus And Building Momentum in 2021

19 January 2021 Categories: Blog

It seems so long ago (it was only last week) that we were cueing the fireworks and celebrating leaving 2020 in the rearview.

But after all of the events of the past week, it seems wise that we might adjust to the fact that the world around us is not what it might have been in the past.

Honestly, it’s getting more and more difficult for me to speak directly into all of these events, knowing that every person who is reading this is processing these events so differently.

To state the obvious, I am not an elected representative; I am a humble, Massachusetts-based tax accountant.

That means that I am going to refocus my efforts at what *I* (and my team) have been called to do. I am going to use the gifts and resources at my disposal to make that “dent in the universe” that Steve Jobs spoke about … and I’m going to do it with *my* universe.

These weekly Notes are my humble little attempt at this.

We’re preparing hard for the 2021 TAX SEASON … because this is what we do.

If you need to reach us as we do, we’re here:
781-767-7473

Last week, I gave a clear rundown of the second stimulus relief bill — the CAA — so let me know if you missed that, and I can point you to it or send it your way.

Here are some thoughts for your work-life, specifically around developing focus, as we try to pick up the pieces together.

Russ Victor’s Four Keys To Focus And Building Momentum in 2021
“The best thing about the future is that it comes one day at a time.” – Abraham Lincoln

Just because you work harder at what you set your hands to, doesn’t mean that you are accomplishing anything of actual significance.

In fact, many times it’s the opposite.

Busyness does NOT equal effectiveness.

Sometimes, you find that you are “working harder” because you have fallen into a pit of poor productivity and efficiency.

What I have found to be helpful is recognizing how there are certain habits and practices that are very likely sucking all of the life-force from your day’s productivity.

As an idea starter, here are four things that very well might be killing your momentum. For you, these might not be an issue, so I urge you, therefore, to consider what really is robbing your attention these days. Especially in the chaos of the beginning of 2021 … these habits might be your “way out” of the chaos.

These are not all merely related to DIGITAL OVERLOAD, either.

But all of them are decisions — those that are made, and those that are avoided.

App Addiction
If you’re constantly checking Facebook, answering or originating random text messages, or have any social media account alerts turned on, you’ll never be as productive as you could be.

One simple way to decrease your Facebook use is to remove the app from your phone. Even if you just use the browser to access it, it’s that extra step or two that it requires that can help your weaker self resist the constant dopamine hit of social media activity.

Email Addiction
Turn off your alerts here, too. Don’t leave your inbox continually open when you are engaged in real work.

Because whenever you click on that “Get Mail” button, your brain drip feeds small doses of Something-Important-Is-About-To-Happen-Juice (i.e. dopamine).

Except, it’s hardly ever truly urgent. It can usually wait for your actual focused attention.

So try this out for just one week and see if you don’t accomplish more than you thought possible.

Other People’s Emergencies
Emergencies aside, send your calls to voicemail first and return them only during set times (and perhaps even state those times on your voicemail greeting). This has three instant benefits.

First, it tells Norfolk County people you are a focused person, which they will respect and even appreciate. Second, it makes you a focused person — keeping you on task and freeing you from interruptions you can’t anticipate.

Third, you can determine if you’re the right person to handle the call or if it can be delegated.

Delegation
As I’ve said, there is a big difference between being busy and being productive. Want to know where you’re just “busy”? Keep track of everything you do every 30 minutes, every day, for one week. Then take all the items that aren’t moving you toward your goals and stop doing them, delegate them to someone else, or hire someone to do them for you.

What will you do with all that extra time? Concentrate only on activities and processes that make money or move you ahead.

The key to more productivity is not more work. The key is more focus. Creating your “Not To Do” List will reset your priorities, refresh your morale, and could even remake your career.

Don’t let your best energy be sucked out of your day. The world needs the positive creation that you will bring to it.

We’re in your corner.

Warmly,

Russ Victor

 

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Five Key Takeaways From The Second Coronavirus Relief Bill For Massachusetts Taxpayers

12 January 2021 Categories: Blog

Say it with me again: it’s a whole new year. 2020 is in the rearview…

And 2021 is starting with some very nice treats for regular families in the clunkily-named “Coronavirus Response and Relief Supplemental Appropriations Act of 2021”, also known as the “Consolidated Appropriations Act” or CAA for short (the CAA is the entire bill … the clunky name is for the part that directly applies to this conversation).

And look — I’ll leave the 2020 lookback thoughts for someone else to tackle. Same with the 2021 “goal setting” thoughts.

Because if last year has taught us anything, it’s to expect the unexpected. Even as I write this, political things are still roiling … but again, I’ll leave that for others to tackle. 🙂

If there’s a goal that I want to hit together, it would be that we get your financial fortress built on solid ground. That way, WHATEVER comes — be it space aliens, EMP blasts, WWIII or even universal basic income —  you’re set up to handle it with strength. Though I’m not sure about the space aliens thing … again, I’ll leave that for others to tackle.

In the meantime, today I thought I’d offer you a fuller, but still basic, summary of the provisions of the CAA that affects Massachusetts taxpayers, including YOU.

Five Key Takeaways From The Second Coronavirus Relief Bill For Massachusetts Taxpayers
“Last year’s words belong to last year’s language. And next year’s words await another voice.” -T.S. Eliot

We’ve all heard about the $600 stimulus payments. You can go here to check on the status of yours, and there’s information on that page as well for those who might not feel like they got what they should have, etc.

But the second relief bill contains many more pertinent provisions for my Norfolk County individual and family clients than merely the payment. So I thought I’d hit the high points for you.

If you need to talk through any of this, we’re right here:
781-767-7473

Key Takeaway #1: The Payments
Just to wrap this and give all the details:

  • $600 per eligible family member
  • $1,200 for married filing joint returns
  • $600 per dependent child under 17 years old

The income phase-out starts at $75,000 of modified adjusted gross income ($112,500 for head of household and $150,000 for married filing joint), all of which is based on information from 2019 tax returns. Taxpayers without a social security number are not eligible. And lastly, if the credit determined on the taxpayer’s 2020 tax return exceeds the amount of the advance payment, the taxpayer will receive the difference as a refundable tax credit. Taxpayers who receive an advance payment that exceeds the credit do not need to repay the amount.

Very helpful stuff.

Key Takeaway #2: Unemployment Stuff
They tacked on an additional $300 per week for all workers receiving unemployment benefits, from December 26, 2020 to March 14, 2021. The bill also extended the “PUA”, a temporary federal program covering self-employed and gig workers, to March 14 (after which no new applicants) through April 5, 2021.

The bill also provides an extra benefit of $100 per week for certain workers who have both wage and self-employment income but whose base UI benefit calculation doesn’t take their self-employment into account.

Key Takeaway #3: Even Better EIC and Child Tax Credit
There is now a special temporary rule allowing lower-income people to use their earned income from tax year 2019 to determine the Earned Income Tax Credit and the refundable portion of the Child Tax Credit (i.e., the Additional Child Tax Credit) in the 2020 tax year. This is very good news.

Key Takeaway #4: Eviction Relief
This new measure extends the moratorium on evictions under the CARES Act, designed to protect renters from eviction, until January 31, 2021. That means, if you are a renter, you have one more month to get right. For landlords, you need to know that you will have to wait one more month.

Key Takeaway #5: Student Loans
College students and parents with federal student loans will receive an additional extension on student loan payments, and won’t be required to make payments on federal student loans until April 1, 2021. This includes both principal and interest payments.

Other Miscellany
Some of these won’t really matter, and verge into tax geek land, but …

  • The 7.5% adjusted gross income limit (instead of 10%) pertaining to the medical expense deduction has been made permanent.
  • The higher learning tuition deduction is now made permanent by increasing the phase-out limits in the permanent lifetime learning credit.
  • Mortgage insurance premiums are continued as qualified residence interest has been extended for one year through 2021 (was due to expire at the end of 2020).
  • There has been a nonbusiness energy property credit for qualified energy improvements to a principal residence, and it has been extended for one year through 2021 (was also due to expire at the end of 2020).

So, all of this is VERY good news. And probably more detail than you actually care about! But that’s why we’re here.

I’m excited to dig into these provisions further, and apply them on YOUR behalf this year, ~Contact.FirstName~.

We’re in your corner.

Warmly,

Russ Victor

 

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Russ Victor’s Very Last Minute Tax Moves for 2020

05 January 2021 Categories: Blog

These weeks are disjointed, these holiday weeks. As of this writing, there are only three days left in 2020, and this week contains New Year’s Eve and New Year’s Day.

So if you want to make ANY 2020 moves (outside of IRA things, which can be retroactively applied after 12/31), time’s a wastin’.

I hope that by the time you read this, you’ve already made the moves you need to make.

And yes, I will address the new government relief bill that the president did, in fact, just sign on Sunday night.

5,500+ pages … I must confess, I haven’t read it all yet. And the tax and accounting sources I trust and follow are also still digesting it. It will take time (and patience) to break it all down. Please bear with us, as we are quite busy with EOY matters this week.

But there seems to be plenty of good news for regular Massachusetts families in there.

Leaving aside the possible inflationary issues, and questions about how all of this will eventually be paid for by taxpayers, the high points are pretty much exactly what I wrote last week, before it had officially been signed.

The quick summary:

  • Additional $600 stimulus payments to individuals, and $600 per child (similar income limitations as before) — there is still discussion of yet more … TBD on that
  • $284B in more PPP funding
  • $300 in federal unemployment supplement, plus extension of earlier unemployment programs that expanded eligibility
  • Extension of the special charitable contribution provisions enacted for 2020 through 2021
  • Extensions, in some cases permanently, of many tax breaks that had been scheduled to expire on 12/31
  • More enhancements to the Child Tax Credit and the Earned Income Tax Credit for low-income families
  • COVID-19-related expenses now qualify as “above-the-line” educator expense deductions

But wait … there’s more.

Plenty of what is not-so-affectionately known as “pork” is in there, as well — which was to be expected. These end-of-year bills are always full of random items.

Patience truly does pay off though — don’t make knee-jerk decisions related to the politics of the moment. Wait until legislation has actually passed. And then let’s take our time together to get it right.

If you want to talk, we’re here:
781-767-7473

But again, have patience. Because of the volume of Massachusetts client requests this time of year (on top of family and holiday-related disruptions), we’re not always able to respond as quickly as you might need.

In which case, I’m going to take the quick opportunity in my last Note of 2020 (!) to recap your possible year-end tax moves…

Russ Victor’s Very Last Minute Tax Moves for 2020
“We didn’t lose the game; we just ran out of time.”  -Vince Lombardi

Because time is short, and some moves do require more than this week to pull off, I’m restricting myself to those tax moves which you can realistically handle before the end of the year (Thursday).

This will be short, and (hopefully) sweet to your wallet…

1) Use Your FSA Funds
Money set aside in a flexible spending account must be spent by the end of the year, else the funds are lost. Some employers allow a 2-and-a-half month grace period. So check with your Norfolk County employer to see what your personal deadline is for utilizing your FSA savings.

2) Make an Extra Payment on Your Mortgage
If you own a house with a mortgage, and you can swing the cashflow hit, add an additional payment before year-end, and the interest on that payment will be deductible for 2020. Of course, that means that it WON’T be so for 2021, but perhaps you can use this as an “extra” payment … and get ahead of the escrow game.

3) Make the Switch to a Roth IRA
Roth conversions are taxed in the year the conversion happens. However, Massachusetts taxpayers have the option to undo part or all of that conversion by their filing deadline. In order to retroactively undo part of their conversion next year, they first have to convert this year. So if you are on the fence about converting, consider taking the plunge before the end of the year, knowing that you (and/or WE) can re-characterize some or all of the amounts early next year.

4) GIVE
You know how I feel about charitable giving by now (I hope). This week, of course, is a big one for non-profits who are the happy beneficiaries of our last-minute donations. And with the $300 deduction available even for those who take the “standard deduction”, your money goes even farther. Please, if you can, give.

You can pay early on a monthly gift, or give a lump-sum gift. The purpose (aside from the many, many benefits to the organization, and to you, of course), being to knock more income into a different tax bracket perhaps, or to simply cut your tax bill, regardless of the bracket status.

Now, there are plenty of others. But these are the quickest, and the easiesttax moves (aside, perhaps, from the Roth conversion — but that can be done quickly).

Others:

  • Max out personal gifts — if you have means, you can give up to $15K tax free to a family member or friend.
  • Max out workplace retirement accounts (if you have one).
  • Evaluate (quickly) what your income might look like in 2021, and try to accelerate or decelerate any kind of income (that you can control) accordingly.

Hope this helps!

More (much more, especially about the relief bill) in the future … in 2021.

Warmly,

Russ Victor

 

“CRISIS Action Plan” for my Massachusetts tax clients and friends — which is still relevant today:

1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.

2) Continue to stay financially and logistically prepared for worsening situations.

3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)

4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.

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Russ Victor’s Annual Holiday Prayer

29 December 2020 Categories: Blog

This will be a different kind of note today than I normally post.

Because the first thing to note is that a bona fide holiday miracle seems to have occurred: Congress agreed on another relief bill.

Given this cultural climate, this might rank up there with the never-ending oil in the lamps of the Maccabees. (Obviously, I exaggerate … slightly.)

I’ll have more details once they become available, probably next week. I’m producing this note before the final vote and the release of the text. But the basics seem to be:

  • Additional $600 stimulus payments to individuals, and $600 per child (income limitations not yet available, but probably same as before)
  • $284B in more PPP funding
  • $300 in federal unemployment supplement, plus extension of earlier unemployment programs that expanded eligibility
  • Various other grants and loans for Massachusetts small businesses, plus special funding for live venues, etc.

Again … final details pending, but this will be very good news for many.

Regardless, we’re chipping away at final year-end moves for Norfolk County clients, and getting ready for the 2021 tax season. We’re right here, if you need us in the meantime:
781-767-7473 

Now … I mentioned how this would be a different kind of note.

That’s because I think one of the gifts of the holiday season (no matter where you fall on the belief spectrum) is the chance to … pause. To reflect.

And this might not exactly be your cup of tea, but I found this holiday prayer some time ago, and it’s worth looking at — if not actually praying it — that we might consider how there is almost always something deeper going on in those around us.

Russ Victor’s Annual Holiday Prayer
”Kindness is a language that the deaf can hear and the blind can see.” -Mark Twain

“God, help us remember that the jerk who cut us off in traffic last night is a single mother who worked nine hours that day and is rushing home to cook dinner, help with homework, do the laundry and spend a few precious moments with her children.

“Help us to remember that the pierced, tattooed, disinterested young man who can’t make change correctly is a worried 19-year-old college student, balancing his apprehension over final exams with his fear of not getting his student loans for next semester.

“Remind us, Lord, that the scary-looking bum, begging for money in the same spot every day (who really ought to get a job!) is a slave to addictions that we can only imagine in our worst nightmares …

“Help us to remember that the old couple walking annoyingly slowly through the store aisles and blocking our shopping progress are savoring this moment, knowing that, based on the biopsy report she got back last week, this will be the last year that they go shopping together.

“Father, remind us each day that, of all the gifts you give us, the greatest gift is love. It is not enough to share that love with those we hold dear. Open our hearts not to just those who are close to us, but to all humanity. Let us be slow to judge and quick to forgive, show patience, empathy and love.

Amen.”

Warmly,

Russ Victor

 

“CRISIS Action Plan” for my Massachusetts tax clients and friends — which is still relevant today:

1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.

2) Continue to stay financially and logistically prepared for worsening situations.

3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)

4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.

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Five Key Habits of the Wealthy Massachusetts Clients We Serve

22 December 2020 Categories: Blog

The clock is really ticking now on 2020.

But before you celebrate, please — for the love of Pete — make SURE that you are getting whatever needs doing done NOW that might affect this year’s taxes. I’ve been banging this drum the last couple weeks, but I know how thick-headed I can sometimes be, so I’m just assuming you’re like me and that you like reminders.

Here’s the quick list of moves to consider, one more time …

  • Project your 2021 income (if you can) and adjust accordingly.
  • Check your withholding. By now, probably just one more paycheck to get right.
  • Spend down your FSA (if you have one).
  • Give to charity — EVERYBODY (and I mean everybody) should give at least $300 — because even if you take the standard deduction, you can ALSO deduct up to $300 in charitable giving. Giving matters.
  • Max out personal gifts — if you have means, you can give up to $15K tax free to a family member or friend. But that ends 12/31…
  • … as does your opportunity to max out workplace retirement accounts (if you have one).

There are plenty more “little” things, or items that might only apply to certain situations, but these are the biggies. So, if you need to have a quick conversation about this, this is where you reach us:
781-767-7473 

Making these kinds of moves while they’re available (i.e. not “missing the boats” when they come your way) is just another marker of the Massachusetts individual who is moving towards building a financial fortress. Those who build real worth in their lives are pausing at the right moments to do what’s needed.

Which is hard in our frenetic culture.

But when you start building the habits of the wealthy into your life, they really do pay off.

Five Key Habits of the Wealthy Massachusetts Clients We Serve
“May your choices reflect your hopes, not your fears.” -Nelson Mandela

I recently wrote about climbing out of debt and other financial holes.

But what do you do once you’ve done so?

It might seem outlandish, this year of all years, to consider the things I’m about to have you consider … but what I’ve seen in working with Norfolk County clients all across the financial spectrum is that these habits begin small.

As I’ve watched clients go from one end of the income scale to another, over the years, here are five habits of the wealthy I’ve seen carried by all of them who moved *up* that scale (and those who started there — without these habits — well … they went the other direction).

1. A future orientation
The wealthy usually carry a willingness to live beneath their means for as long as it takes to reach their financial goals. While their peers are showing a tendency toward embracing the good life at the first sign of prosperity, the would-be wealthy take a pass on all of that.

While others are saving 6-10% of their annual incomes — usually for retirement — people who want to be wealthy often save 20, 30, 40 or even 50% or more of their incomes.

Imagine how much money you’d have saved in 10 years if you saved half of your income during that time? The fact that no one ever sees this happen is one of the reasons that people believe that the wealthy somehow “come into money.”

2. Careful spending
The self-made wealthy learn early in life that you never pay full price. The combination of this habit with delayed gratification is a powerful force when it comes to growing wealth. Not only do you spend as little money as possible, but you buy at a discount when you do.

While most Massachusettspeople are buying the most expensive house they can afford, the rich-in-progress buy beneath their means, and buy the cheapest house in the neighborhood to boot. They first ask themselves, “How much house can we truly afford right now?” The same is true of buying cars: If one wants to be rich someday, he buys a conservative car — and buys it used.

3. Avoiding debt whenever possible
Debt represents a reduction of future cash flow and the wealthy will avoid it. By paying cash on the barrel, there are no strings attached to what you buy that might compromise your ability to continue saving money at a high rate.

Notice how the drive to save large amounts of money causes frugal spending habits, which then enable the ability to make purchases without using debt; the three habits combine to form a pattern that brings the aspiring rich to the point of great wealth earlier than an outsider might expect.

4. Low risks and high yields
If you want to be rich, the first rule of investing is to not lose money! If you have a small amount of money to invest you might be tempted to put it all into high-risk growth stocks in the hope that a big run-up in value will make you rich. But if you have — or hope to have — a large portfolio to invest, you might not take that kind of risk. Your investments will be in assets that are unlikely to collapse in price, reasonably likely to grow in value over time, and able to provide a steady cash flow while you wait for them to grow.

For those who are starting out, a perfect investment asset might be an undervalued (and therefore very likely to grow) blue chip stock (not likely to collapse) with a history of above-average dividend yields (steady cash flow). Or a good index fund. You don’t need your investments to make you rich — you’re already on your way there, and just want to further grow your wealth, steadily and predictably. (Of course, the specific strategy will vary from person to person, and at different stages of life, so this isn’t necessarily intended to be personalized investment advice for you.)

5. Ruthless ability to say “no”
My wealthiest Norfolk Countyclients have the ability to center on the most profitable ventures and to let go of nearly everything else. They often do this by delegating non-profitable activities to others, if not making those activities somehow go away altogether.

This is easier to do when you have money to pay others to handle them for you, or when your finances are relatively uncomplicated. If, for example, the rich person has a business, he might pay someone to handle specific aspects of the operation that are necessary but produce little or no revenue. That frees him to concentrate all of his efforts on generating more income for his business. As a result, his business and his income grow much more quickly, making him wealthier still.

One thing I’ve seen in my clients with means: Becoming wealthy is really a lifestyle as much as anything else. Once you adopt it — by living beneath your means, staying out of debt, and saving large amounts of money constantly, you have capital to invest (conservatively) and to pay others with, in order to free you up to make even more money. It’s not so hard to see why the wealth of the self-made rich seems to spring out one day as if there’s a winning lottery ticket in the mix.

But that’s simply not the case, and my self-made wealthy clients know this.

Give YOURSELF the gift of light at the end of your tunnel, and remember … we’re here to help:
781-767-7473

To your family’s lasting financial and emotional peace…

Warmly,

Russ Victor

 

“CRISIS Action Plan” for my Massachusetts tax clients and friends — which is still relevant today:

1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.

2) Continue to stay financially and logistically prepared for worsening situations.

3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)

4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.

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Paying Off Debt by Russ Victor

15 December 2020 Categories: Blog

Last month, I talked about [ENGBLOG]some potential moves Massachusetts taxpayers could make by the end of the year. I wanted to remind you of those possibilities before I get to what else I want to talk with you about… (paying off debt)

Those were:

  • Look ahead to 2021 — project what your income might be, then make withholding and tax moves accordingly. Note: anyone who tells you definitively what a Biden administration would bring for your taxes is blowing smoke. We’ll have more to say about these things as they happen. More about this in future weeks as things become more clear.
  • Adjust your withholding — you still have 1-2 paychecks to catch up on any overpayments or underpayments for this year.
  • Spend down your FSA (if you have one) — don’t let these funds go to waste
  • Give to charity — even if you take the standard deduction, you can ALSO deduct up to $300 in cash giving. DO IT.
  • If you can, give tax-free gifts to family — if you have means, this is the simplest way to avoid estate taxes. You can give up to $15K tax free.
  • Max out Massachusetts workplace retirement accounts — I know, this is “la la land” for some, but if you still get this sort of perk, you only have a few more weeks to maximize it.
  • Gather your virtual currency docs if you have them. IRS is scrutinizing these starting NOW.

Again, if you need a conversation, now’s the time.
781-767-7473 

One more quick note: mortgage rates are obscenely low right now. If you have a mortgage, it might be worth running some numbers related to refinancing. 15-year rates were under 2% last I checked … which is the lowest I’ve ever seen.

None of what I have just written will help you if you’re unemployed and drowning in debt. 2020 has been so terrible for so manyMassachusetts taxpayers2. I have hope that there might be light at the end of this dark tunnel, but when you’re “in the tunnel”, not much feels like it can help.

Sometimes, though, making a plan for paying off debt is the best way to begin to see light at the end of a dark financial tunnel.

Thought I’d bring some light today, for you, if you’re beginning to swim in some deep financial waters…

Paying Off Debt by Russ Victor
”Tough times never last but tough people do.” -Robert H. Schuller

The average credit card balance for an American household as of this month was $5,897, which is (remarkably) DOWN from years past. Also interesting: personal bankruptcies are NOT yet rising, compared to years past.

But unemployment is still VERY high, and Congress has been slow to create more relief. There is a very good chance that 2021 could be very ugly for a significant portion of my Massachusetts readership, and our nation.

You may be in a better situation … it may also be worse. So, to answer the questions we often get around here from clients facing tough times, I’ve put together a step-by-step process which we often help people work through.

1. Do NOT just pay minimum payments
If you only pay the minimum payment each month, credit card and other loan companies typically engineer the “default” repayment plans such that your bill could continue to INCREASE, even if you completely stop using your card or source of credit. This is called “negative amortization”–where you think you are paying off debt but the additional fees and finance charges are more than the minimum payment. The bottom line is: Pay more than your minimum or you will eventually be in debt over your head. 

2. Set it and forget it
With online banking and automatic payment options, there are GREAT tools for ensuring you don’t mess up because of administrative chaos. If you feel you can’t manage all your bills by pen and paper, there are several good software programs available for keeping track of your financial records.

In fact, I recommend that you automate a payment ABOVE the minimum monthly payment, just to be certain that you start getting ahead of the game. Do it now, while you’re feeling that zeal. Again, those minimum payments are rigged against you, and the only way to get ahead is to … get ahead. I have some more thoughts on automation in a moment.

3. Get on the phone and ASK — and then send a letter
No, you do not need to be an attorney or other Massachusetts financial professional to negotiate with your credit card company (negotiating with the IRS, on the other hand, is a very different story!). The amount of consumer debt in this country has made creditors realize that they need to be more understanding of their customers — if they hope to get any money back. If you file bankruptcy they are only going to get pennies on the dollar, so they are often willing to make deals.

Open communication always helps. Usually credit card companies get ignored and end up sending delinquent files to a collections agency. So they’ll actually appreciate your openness in contacting them, and may be more understanding of your situation. Proactively dealing with your debt problem, rather than hiding, will not only help your financial problem, but will make you feel better about yourself as well.

4. Pay down proportionately
If you are not able to pay the full amount of your credit each month, you should still pay something to stay on top of it. You should work off of a written budget so you know exactly where you stand. Some experts suggest that you divide your monthly debt budget by the percentage each bill makes of the total and pay that amount.

Here’s an example: If you owe a total of $1,000, and one credit card is $800 and the other is $200, and you only have $100 available to pay for that month… You should pay $80 on the $800 balance, and $20 on the $200 balance. This way you are reducing each debt by the same percentage. 

If you have multiple debts (excluding your mortgage), a simpler option is to make a list of all of the balances. Put them in order from smallest to greatest, and make payments on only the smallest first, until it is paid off. Then move on to the next, and so on.

Whichever method you choose, the important thing is to have a plan and commit to following it.

5. Remember: there are people on the other side.
Don’t be intimidated. No matter how forthcoming and honest you are, some creditors have been taught to be mean and downright nasty. Hang in there, and don’t let this tactic intimidate you.

Give YOURSELF the gift of light at the end of your tunnel, and remember … we’re here to help:
781-767-7473

To your family’s lasting financial and emotional peace ~Contact.FirstName~…

Warmly,

Russ Victor

 

“CRISIS Action Plan” for my Massachusetts tax clients and friends — which is still relevant today:

1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.

2) Continue to stay financially and logistically prepared for worsening situations.

3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)

4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.

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When Conventional Financial Advice Is Wrong by Russ Victor

08 December 2020 Categories: Blog

Is there such a thing any more as “conventional wisdom”?

It’s a fair question to consider as we retreat further and further into our ideological silos as a society — only reading “news” from the slant that makes us feel smartest (“See, if [smart person I read] says it’s true, and I already think it’s true then it must be!”).

Truly, it would take smarter writers and thinkers than this here Massachusetts tax accountant to make sense of what’s happening to us. The media landscape is vastly different than it was even 10 years ago … and it’s unclear whether it’s for the better. There are good arguments to be made that the eventual social results will be both much worse AND that they will be much better.

We shall see.

Either way, what used to pass for “conventional wisdom” in certain circles doesn’t in others.

But there are still certain realms in which there are yet “the way things are done” (i.e. conventional wisdom). The financial advice realm is certainly one of those.

So, today, I thought I’d do my little part to encourage you to think outside the box.

Before I get there, a quick tax note worth knowing…

I have told you before that most tax planning opportunities (i.e. making proactive moves to avoid overpaying your taxes) completely dry up after 12/31. Just to be clear, that is ONE MONTH AWAY.

We’re here to help…
781-767-7473 

When Conventional Financial Advice Is Wrong by Russ Victor
“If you believe it will work out, you’ll see opportunities. If you believe it won’t you will see obstacles.” -Wayne Dyer

The problem with “Googling for financial advice” is that you’ll often get the blandest or reheated leftovers for advice. The “content farm” websites out there churn out the same old information, and it’s simply not applicable in every situation.

That’s why it’s always helpful to have someone who can speak into your specific situation. (Which, ahem, is what we’re here for.)

Because when you make financial choices, “tried and true” ideas don’t always equate to the best outcomes for YOU. So, when you find yourself adhering to the following “rules”, it might be worth a second look…

1) Go for the highest return when you invest (always).
Seems like it would be a truism — but high returns frequently involve higher risks, as well as bigger fees. You may be better off seeking safer, more conservative investments, even if they don’t produce as much in the short run. It all depends on YOUR goals.

2) Your primary home should be a great investment.
You may think that renting is just throwing dollars down the drain. But most homeowners don’t properly account for maintenance costs, transaction fees (on the purchase AND the sale) and while mortgage rates are obscenely low right now … they won’t always be.

3) Avoid any and all debt.
“The debtor is slave to the lender” and all that. Generally speaking, Dave Ramsey is usually right when it comes to financial principles. And you should certainly avoid overextending yourself. However, some debt can be useful when buying a house (when that’s appropriate — see above), or in certain business situations. But sometimes, cash money can be seen as its own particular kind of resource — and you can “buy” it at different rates, and “sell” it at even higher ones. This is the essence of arbitrage.

It can be a dangerous game, however, when undertaken without discipline — and smart advice in your corner.

4) Sell high.
What goes up must come down, right? But when it comes to equities and other stocks, it is occasionally helpful to hold onto high-performing assets (stocks) in your portfolio simply to keep maintaining them as such. Resist the urge to cash out just because a stock has reached an all-time high. Otherwise, in time, you could end up with a bundle of low-performing investments.

5) You can do everything yourself.
You can trade your own stocks if you want, but you’ll often do better working with a good financial planner.

And you can prepare your own taxes, but, well … as I think you probably understand, it’s better to work with someone who knows the system like the back of their hand.

We pay attention to this stuff so you don’t have to. And we’re in your corner.

781-767-7473

To your (extended) family’s lasting financial and emotional peace

Warmly,

Russ Victor

 

CRISIS Action Plan” for my Massachusetts tax clients and friends — which is still relevant today:

1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.

2) Continue to stay financially and logistically prepared for worsening situations.

3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)

4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.

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Cultivating Gratitude for Thanksgiving 2020 in Massachusetts

01 December 2020 Categories: Blog

I think we all need this week.

2020 has been *so hard*, for so many in Massachusetts (and far beyond!). And it’s not over yet — from continued electoral fighting, to spikes in virus cases and increased governmental restrictions all over the place, and (of course) the murder hornets.

But with the inexorable passing of time … Thanksgiving 2020 comes to us. And we pause to find glimpses of the light, to find goodness in the midst of seeming chaos and lots of bad news.

Because while things out there seem pretty bad, I like to remind myself this time of year that we’ve been in very broken and divided places as a nation before — and worse.

I like to remind myself that this holiday was set into our federal law books right in the middle of our nation’s most brutal conflict. Though we commemorate the Pilgrims’ story, the actual federal holiday was declared by President Abraham Lincoln in 1863, when the bloodshed of the Civil War seemed never to have an end.

(Here’s a link to his proclamation which is worth reading annually.)

And today, in 2020, we seem to find ourselves in the middle of culture wars, election wars, political wars, economic wars. And we sit with the knowledge of many lost lives due to the virus and the various control measures.

So … can we yet give thanks?

I say YES.

Because we must, and because to do so is what sets us apart from our baser selves, and it is the very action that moves our hearts in the direction of what all of us are working hard for in the first place: contentedness and peace. 

I say this, because I sit in my office and on Zoom calls, and I meet with a procession of “wealthy” and “poor” clients — families with 7-8 figures in the *bank*, and those going underwater.

If you saw what I see, you would see what I get reminded of regularly: Sometimes the “wealthiest” among us can be the most impoverished … and those without many zeroes in their accounts can be flat-out rich.

Being “rich” is truly a state-of-mind — it’s not even really about money, and it’s tied to gratitude. It affects how you see savings, retirement, the current and future economy, career growth or investment. And, of course, gratitude is the enemy of fear. It’s like an opposite magnet for it — walk in gratitude, and fear seems to melt away.

So, here’s my advice for Thanksgiving 2020: Whatever financial (or otherwise) situation you happen to be in after this donkey of a year, find a way to be thankful. There are hidden blessings in any trial … and hidden fears lying within any windfall or revenue surge. Find and savor the blessings, and watch your family, your co-workers and your domain benefit as a result.

As I sit down at my own table this week … I am thankful for you, ~Contact.FirstName~ — and people like you. Thank you for your trust, for your business during a VERY intense year … and for rolling with us during so many difficulties and changes.

No matter what happens with Presidential politics or with governmental restrictions, I,  alongside your friends here at Rusself Victor, CPA, PC, am in YOUR corner.
781-767-7473

So … thank you.

Happy Thanksgiving 2020.

Russ Victor

 

CRISIS Action Plan” for my Massachusetts tax clients and friends — which is still relevant today:

1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.
2) Continue to stay financially and logistically prepared for worsening situations.
3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)
4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.

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Russ Victor’s Tax-Wise Charitable Giving Strategies

24 November 2020 Categories: Blog

Fatigue.

Lockdowns, election politics, masks — we THOUGHT we might be done with these things by now … but nope. And I bet you’re tired of it all. Most Massachusetts people are, aside from the zealots on every side. And I get it.

That doesn’t mean these things aren’t important (they obviously are), but a certain level of numbness has set in, especially in areas where Thanksgiving and the holidays are being directly affected. (Hey, bright side: less chance of politics-driven fistfights when the table is smaller!)

It’s a good idea to take your internal temperature and do whatever you need to do to get to a place of focus. Many of our Norfolk County clients are under enormous pressure for one reason or another, and all of the media-fueled anxiety (from both directions) is NOT helping things.

As that old “going on a bear hunt” ditty says: Can’t go over, can’t go under it … gotta go through it.

But maybe you can ignore it. Unplug a little. Stay off social media. Only read important content (like THIS, naturally). Focus on your domain and build the financial and relationship fortress you need to carry you through whatever might come.

And another way to keep your mind clear (and not so focused inward) that I like to raise this time of year is giving.

But there are traps ahead, sitting alongside opportunities.

Read on.

Oh — and I should mention again: most tax planning opportunities completely dry up after 12/31, so let’s talk if you think you could use some help…

781-767-7473 

Russ Victor’s Tax-Wise Charitable Giving Strategies

“When you are kind to others, it not only changes you, it changes the world.” -Harold Kushner

In the midst of this cultural and economic insanity, one of the hardest-hit groups has been those who rely upon charitable donations. And right now, if you’re paying any attention (though I would remind you: see above, and don’t pay TOO close), you know that there are more people who need help right now than maybe any holiday season in recent memory.

It’s financially wise to make a habit of giving to charity. It’s not a mystical pay-it-forward thing; simply put, those who engage in this habit see the world as holding more possibility and themselves as having more power to effect change.

Plus:

  • You create for yourself a network of people and organizations who are grateful.

And:

  • When you take a moment to think about the beneficiaries of many of these organizations, you realize that your circumstances really aren’t as tough as you might think.

All that said, here’s how you can maximize the TAX benefits of said giving, here in 2020…

1) Stack donations. Because of the TCJA, the standard deduction is raised and there are new SALT restrictions (state and local taxes), and therefore more people use the higher standard deduction ($12,400 single, $24,800 married filing jointly, $18,650 head of household) — in which case, you lose the charitable tax deduction. So to solve this, “stack” your donations to have them all count during one taxable year.

It MIGHT be that that year should be 2021 for you — but I would notify your beneficiaries and make a plan for giving in January … just so you are a person of your word.

2) Investment donations — get an appraisal.

If you’ve held an investment for over a year that has appreciated, get that appraisal and take the donation for the current market value. For instance, if you have a stock you might sell, donate the stock itself at the current fair market value. You won’t pay as much tax, can take a better deduction, and the charity gets more.

3) Cash donations in 2020.

I mentioned this previously, but THIS YEAR ONLY (per the CARES Act), you can take the standard deduction, as well as up to $300 of cash donations. Has to be cash though, and it’s up to $300 per return, so if you file jointly, it’s only $300.

4) Remember what is (and isn’t) a deductible gift.

Whatever organization to which you’re giving has to be an IRS-recognized section 501(c)(3) charitable organization. Just to make sure, click on over to the IRS’s online “Tax Exempt Organization Search” tool to see if that group you like really is tax-exempt and can receive actually tax-deductible contributions. When you give a gift to somebody — say with Venmo or via GoFundMe’s that are intended for an individual or non-501(c)(3) group — that’s not deductible. (But if the target recipient *is* a 501(c)(3)  you *can* deduct it.)

I firmly believe in the power of charitable giving, both for your tax return and (even more importantly) for your state-of-mind.

Stay focused out there.

For all of these things, we’re here to help. 781-767-7473

To your (extended) family’s lasting financial and emotional peace…

Warmly,

Russ Victor

 

CRISIS Action Plan” for my Massachusetts tax clients and friends — which is still relevant today:

1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.

2) Continue to stay financially and logistically prepared for worsening situations.

3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)

4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.

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Russ Victor’s Seven End of Year Tax Planning Strategies

17 November 2020 Categories: Blog

Here we are, a week past the election, and it’s looking like the year 2000 all over again, with a long, drawn-out process until there is final certification of this election. Back then, it took a full five weeks for all of the legal process to play out. Hopefully, by the end of this process, we can all accept the final outcome, and move together as a country.

At least now we have social media to help us with all the healing! (That was a joke, in case you weren’t clear.)

But really — this is a great time to steer clear of social media and keep your mind clear for what YOU are called to do, both vocationally and in your personal life.

No matter what happens in Congress and in the White House, the most important factor for how well you might move forward is entirely up to the decisions that YOU make. Nobody else can do what you do.

For example, YOUR financial situation is far more likely to be impacted by one simple factor: whether you make decisions with the future in mind … or not.

And one of those future events will be that this donkey of a year, 2020, WILL END.

And with it will end any opportunity you might have to make tax-related changes to your financial situation. Most tax planning strategies completely dry up after 12/31, so take a look at these and let’s talk if you think you could use some help…

We’re right here: 781-767-7473       

Russ Victor’s Seven End of Year Tax Planning Strategies
“When you know better, you do better.” -Maya Angelou

Ah, November. Cool weather, Thanksgiving, football. Even though 2020 still seems to be chugging along in all of its particular form of glory, we can at least get productive and distract ourselves from the political war games by making a positive impact on our financial world.

Here are some tax planning strategies to consider as you do:

1) Look ahead to 2021. By that, I mean: what will your income potentially look like in 2021? For some, ANY income after a very rough 2020 would be welcome. But once you have that landed … should I accelerate possible 2021 income into 2020 for tax reasons? Because the best of both tax worlds is to reduce your taxes in both years.
So take a look to see what you think your income will be looking like by the end of this year (including any investment year-end payouts, gig work, gambling winnings, etc. ) and what you expect it to be in 2021 (more, less or about the same). Next, check out the tax brackets and evaluate whether you need to defer current taxable income or accelerate write-offs into 2021 or vice versa. Keep more take-home through proper planning!

2) Adjust your withholding. By now, you should be able to look at what your income will most likely be by year-end, and you can keep more of it in your pocket instead of “loaning” it to Uncle Sam via withholding, and getting it back via refund. Conversely, you can make sure you don’t get slapped by a bill. (Remember, unemployment compensation is usually taxable.)

3) If you have one, spend down your FSA. These are usually offered through big Massachusetts organizations and companies, and can be a very nice benefit. They set aside pre-tax dollars that you can spend on medical expenses that aren’t covered by your insurance. But they have one big drawback: you have to use up all of it by the end of the benefits year, which is Dec. 31 for most companies, or you’ll lose them.

4) Give to charity. Did you know the CARES Act enables you to deduct up to $300 in donations, even if you take the standard deduction? I’ll have more to say about this in future weeks, but it’s a great idea to get in this habit, and hopefully you are able to give much more.

5) If you have the means, give tax-favored gifts to your family. This really is for those who are in retirement, and who have socked away a fair amount. You can give $15,000 per person in 2020 and in 2021 each tax year without paying gift tax or tapping your lifetime estate and gift tax exemption. Your spouse can do the same, even to the same person. But again … use this clause or lose it forever after 12/31.

6) Max out any workplace retirement accounts. Like 401(k)’s — that deadline is 12/31. Regular IRA and Roth IRA’s can be added to even up to 4/15/21.

7) Collect any virtual currency documentation. New this year, the IRS is asking people on PAGE ONE of the 1040 whether you had any such transactions, etc.

Yes, that stuff can be more secure and a form of investment … but it ain’t tax free.

For all of these tax planning strategies, we’re here to help. 781-767-7473

To your (extended) Massachusetts family’s lasting financial and emotional peace ~Contact.FirstName~…

Warmly,

Russ Victor

 

“CRISIS Action Plan” for my Massachusetts tax clients and friends — which is still relevant today:

1) Don’t marinate in other people’s panic. Be mindful of your social media consumption.

2) Continue to stay financially and logistically prepared for worsening situations.

3) Make sure you have some ready, liquid assets, if you are able. (I.e., cash in the bank, and in hand.)

4) Set aside plans for any big spending until the dust settles — but especially look out for your small business owner friends and vendors.

Read the full article 0 Comments