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Archive for November, 2010

26
Nov

Individual (solo) 401(k) for the self-employed

Janet Kidd Stewart’s recent article reminded me how frequently solo business owners, whether ot not incorporated, tell me they have never heard of these plans.  These plans permit contributions of the 401(k) deferral, currently $16,500, plus the annual limit for a profit sharing (defined-benefit plan).  The calculation for a sole proprietorship differs from the one for a corporation.  Unlike other plans, such as a SEP, these plans must be established by the end of the tax year.  That would be December 31 if a calendar year is used for the business.  Although these plans allow a greater contribution, they do not require any contribution.  The contribution is not required to be paid by year-end.  It must be paid by the due date, as extended, for the tax return.  That is, individual (solo)plans provide added flexibility.  As with any tax and financial planning opportunity you must see how it impacts your individual situation.

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21
Nov

“The Blur Between Spending and Taxes

N. Gregory Mankiw’s column in the Nov. 21st discusses the relationship between “tax expenditures” and tax rates.  The basis of the discussion is that a balanced budget implies that income (taxes collected) equals spending (expenditures).  Bringing both into balance requires that the supporters of each source of income and each expenditure has their own supporters.  Complicating the process is that the different proponents of each expenditure and source of income have a different view on what is fair/proper.  To illustrate his point he asks if the tax deductions for homeownership is fair to those that rent. 

Click here to read original article…

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17
Nov

Market Optimism is an Ominus Sign

This article discusses why investors can not rely on the views of “money managers”.  One reason relates to the difficulty of forecasting the future.  Then there is the fact that forecasts are not accurate.  Another reason is that with substantial funds being committed to the market there is less money to available to buy into the market.  Investors should stick with their investment allocations and reallocate periodically rather than chase the market.

Click here to read original article…  

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17
Nov

Warren Buffett’s open letter to Uncle Sam

Most articles and commentary about the performance of our economy emphasise the negative.  Mr. Buffett’s thank you is critical of how Uncle Sam functions.  However, the focus is on the results and the efforts of some of the players.  It is fitting that he published it so close to Thanksgiving.

Click here to read original article… 

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