Tax Tips – Year-End Tax Tips

2020 is almost over, which means it’s time to start wrapping up those taxes for the year! There are lots of things to do to prepare for 2021. Here are some year-end tax tips to consider:

  • If you think you will be in the same or a lower tax bracket next year, it may be beneficial to defer income until 2021. This could include self-employment income or year-end bonuses.
  • You may be able to take some last-minute tax deductions, such as controlling when you contribute to charity.

The end of the year is the perfect time to talk with your tax professional on how to position yourself for 2021.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from Turbo Tax[8]  


[8], December 11, 2020

Cases Rise, Stocks Retreat – WEEKLY UPDATE – DECEMBER 14, 2020

The Week on Wall Street

Stocks retreated last week on rising COVID-19 infections and slow progress on an economic relief bill.

The Dow Jones Industrial Average dipped 0.57%, while the Standard & Poor’s 500 dropped 0.96%. The Nasdaq Composite index fell 0.69% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, declined 0.05%.[1][2][3]

Stimulus Stalls, Stocks Stumble

The market grappled all week with worries over rising COVID-19 cases and the economic restrictions that followed. Nevertheless, there were moments of optimism- such as the starting of vaccinations in the U.K.- that drove markets to record highs.[4]

But gains could not be sustained as an agreement on a fiscal stimulus bill remained elusive and daily news regarding COVID-19 cases undermined investor sentiment.

Markets were also challenged by having to absorb a number of new and secondary stock offerings last week, including two high-profile technology IPOs. The Energy sector continued its strong run, while small and mid-cap stocks posted another week of positive performance.[5]

A “No-Deal” Brexit More Likely

The prospects of an agreement to manage Britain’s exit from the European Union by year end dimmed as the two parties failed to narrow their differences in a meeting held last week.[6]

Though primarily a European issue, a no-deal Brexit may hold consequences for U.S. businesses and investors. The failure to reach an agreement has the potential to disrupt an already fragile supply chain and cause issues in the financial markets. A supply chain disruption may weaken European economies (e.g., Germany) that are important to American companies. Another consequence may be a stronger U.S. dollar, which would make American exports more expensive and less competitive.

Little time remains in striking an agreement since the prevailing framework ends December 31, 2020.

[1] The Wall Street Journal, December 11, 2020

[2] The Wall Street Journal, December 11, 2020

[3] The Wall Street Journal, December 11, 2020

[4], December 8, 2020

[5], December 10, 2020

[6], December 9, 2020

Tax Tips – Paying Employment Taxes? Make Sure You’re Using the Correct Form

If you’re a small business owner, you should understand the differences between two commonly used employment tax returns.

Form 944, Employer’s Annual Federal Tax Return, is designed for small business owners to pay employment taxes once a year instead of quarterly. Business owners may receive a notice from the IRS informing them that they can file Form 944. Business owners may have to file this form every year until the IRS notifies them differently.

Form 941, Employer’s Quarterly Federal Tax Return is a form designed for employers to report income taxes, Social Security, or Medicare tax withheld from employee’s paychecks. Again, the IRS may inform business owners of whether they should use Form 941.

If you have questions about which form you should use, please contact our office. We may be able to provide some guidance or help you find some information on the IRS website.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS[10]


[10], December 17, 2019

Is Stimulus Near? WEEKLY UPDATE – DECEMBER 7, 2020

The Week on Wall Street
Stocks marched higher last week on an improving outlook for the passage of a fiscal stimulus package.

The Dow Jones Industrial Average rose 1.03%, while the Standard & Poor’s 500 tacked on 1.67%. The Nasdaq Composite index gained 2.12% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 0.78%.[1][2][3]

A Record Week for Stocks
After opening the week with moderate losses amid rising COVID-19 infections, stocks turned higher as investor sentiment was buoyed by the resumption of fiscal stimulus negotiations. As lawmakers discussed various proposals, stocks managed to grind higher.

A better-than-expected jobless claims report on Thursday added fuel to the market rally, but the gains evaporated in late-day trading following news by a major pharmaceutical company that it would be slowing its rollout of the vaccine due to logistical challenges.[4]

A disappointing jobs report on Friday did not keep investors from bidding stocks higher as the week came to a close, sending the Dow Jones Industrials, S&P 500, and the NASDAQ Composite indices to record high closes.[5]

The Start of Holiday Shopping
The start of the holiday shopping season provides important insight into the state of the economy and overall consumer confidence. In response to the pandemic, consumers avoided in-store visits over the Thanksgiving weekend. This translated into a 22.4% decline in spending from last year’s levels.[6]

However, spending prior to the Thanksgiving-to-Sunday period surged 65.7% from a year earlier, thanks to large retailers introducing Black Friday-like deals as early as mid-October.[7]

Of course, the pandemic has led to an acceleration in shopping online. Cyber Monday sales jumped 15.1% over last year’s levels as consumers spent almost $11 billion, making it the largest U.S. online shopping day ever.[8]

[1] The Wall Street Journal, December 4, 2020

[2] The Wall Street Journal, December 4, 2020

[3] The Wall Street Journal, December 4, 2020

[4] The Wall Street Journal, December 3, 2020

[5] CNBC, December 4, 2020

[6] CNBC, November 30, 2020

[7] CNBC, November 30, 2020

[8] CNBC, December 1, 2020

Total Return on Investment

Manage Your Portfolios for Total Return on Investment

In our last post we briefly discussed seven principles of long-term investing. Beginning with this post, we will take a deeper look at each. Before we do, however, let’s remind ourselves of the seven principles: 

  1. Total Return on Investment 
  2. Don’t Chase the Crowd 
  3. Remain Flexible and Diversified 
  4. Buy Value 
  5. Manage Risk 
  6. Learn from Mistakes 
  7. Monitor your investments 

Total Return on Investment 

The word “total” is not to be taken lightly. In fact, it is the operative word in this principle, because there is more to the ROI (return on investment) than the daily gains and losses your investments experience. It’s human nature to focus on the daily activity, but there are other factors lurking that can eat away at your portfolio. You rarely, if ever see them, but the damage they can do is not insignificant 

The three most insidious are taxes, inflation and fees.  

If you are not accounting for these three, then you are not accounting for the total ROI of your portfolio and, in doing so, are missing a major piece of the picture that could lead to considerable financial pain when you retire.  


On the surface, fees may seem less onerous than taxes and inflation, and you can certainly look at them in that way, but they do add up. Even at 1% you are paying $1,000 for every $100,000 invested. That may not seem like much, but that fee comes right off the top regardless of how well your portfolio has performed.  

Fees structures vary depending on a few factors. If you have a professional managing your investments, you can count on paying a flat 1%-2% fee on the balance of your accounts.  

You can avoid that percentage by managing your own accounts, but beware that there you will likely be paying fee for every transaction you make.  

The bottom line with fees is to do your homework, ask the questions and make your decision based on what you are most comfortable doing.  


When it comes to paying taxes, we all want to keep as much of what we earn as possible. When it comes to investing, there are a few ways taxes can reduce the value of your portfolio each year with taxes on capital gains, dividends and income (from taking distributions). 

Whatever your investment strategy, you need consider the tax burden with the goal, of course, of keeping as much of what you earn as possible. Don’t take this to mean that taxes should drive your investment strategy. On the contrary, like all other variables, it is something to keep in mind. There are two things to consider here, tax efficiency and tax-deferred investments.  

By incorporating a tax efficiency plan into your investments, you will reduce the burden of capital gains, dividends and income taxes. If you use a tax deferral plan, your investments will grow tax free, paying taxes only on the money you withdraw.  

As always, study your options and create a plan that balances your goals with your risk tolerance.  


Of the three portfolio eaters, inflation is the worst. While fees and taxes also reduce the overall value of your investments, at least you can see them on your statements and tax forms. Inflation is different. It’s constantly at work, but you can’t see it. There is no box for it on your monthly or annual statements. So how do you account for something that can’t be seen. Let’s start by doing a little math.  

We’ll start with a portfolio of $100,000 and an annual inflation rate of 4 percent. In ten years, that same $100,000 will have the purchasing power of $67,500. If you want $100,000 in today’s money to be worth $100,000 in 10 years, the real value of the account will have to grow by 48% to $148,000. Oh, and we aren’t including fees and taxes in this total, so it will need to be much higher.   

Part of your strategy must include investment vehicles that will appreciate enough in value to overcome the rate of inflation, which has averaged 3.2% over the last century. Equities such as common stock have proven to be good performers over time. They do open you up to more of a tax risk, but putting too much in fixed-income securities, leaves you exposed to inflation because they don’t grow at the rate of equities.  


Total return on investment is where your focus should be when calculating the value of your investments. Accounting for fees, taxes and inflation will give you a better picture of the health of your portfolio and better visibility into your future standard of living.  

As always, do your research and think about your decisions in terms of where you are in terms of timeline to retirement and your comfort level in terms of risk.  

seven principles of long term investing

Seven Principles of Long Term Investing

When you invest for retirement, you are in it for the long haul, but don’t make the mistake that you can set-it-and-forget-it. There are literally hundreds of variables that can impact your investment portfolio and no one person can track or predict them all. New administrations, federal and state, bring changes in economic policies. Domestic and foreign unrest can cause uncertainty. Regardless of what is driving the changes, some stocks are increasing in value while others are decreasing. With so many variables outside of your control it’s easy to fall into the trap of becoming reactive. To help you avoid the trap, we offer you 7 Principals of Long-Term investing. These 7 principals will steer you around the pitfalls that trip up many investors. Things like fear, greed, lack of discipline and groupthink can wreak havoc on a portfolio and prevent you from achieving the standard of living you want in retirement. Nothing is perfect, but if you follow our principals you will be better equipped to deal with what you can’t control making you a happier and less stressed investor.  

Unlike “buy low, sell high” (which is a myth we will take on at some future point) the seven principals are not investing strategies. Rather, they are general practices you should follow over the course of your investing life. We will present them to you in two ways. First, you will find the list below, with brief descriptions of each. Second, over the next several weeks we will go into depth on each, so you will understand of each individually and how they play as part of the whole.  

Again, nothing will guarantee investment success and this list is not exhaustive, but you will find them helpful and useful in making investment decisions.  

  1. Total Return on Investment. As you login to your accounts and to check balances and the latest gains and losses, keep in mind that you should focus on the total return on investment (ROI). The performance of your investments important, of course, but there are other factors to consider. Things like fees, taxes and inflation may not affect the daily performance and you may not see them lurking, but they are there, and each will affect your total ROI.  
  2. Don’t Chase the Crowd. The economic law of supply and demand also applies to investing. More often than not, by the time you hear about the latest, greatest investment the demand for it has driven the price up so high that it no longer makes sense to invest.  
  3. Remain Flexible and Diversified. You are probably aware that it is wise to include different types of investment vehicles in your portfolio such as stocks, bonds, international securities, etc. The complement to diversification is flexibility. Your investment strategy should be flexible so you can quickly adjust as the situation warrants. Recall the factors we mentioned at the beginning, the ones you have no control over. Flexibility can be the difference between huge losses and gains when the unforeseen happens.  
  4. Buy Value. It’s important to keep an eye on market trends and economic outlooks. But using them to decide where to invest can be a recipe for disaster. Buying value – quality investments with good fundamentals – is a strategy that will server you better over the long run 
  5. Manage Risk. Probably the most individual of all the principals, there are two factors that you need to consider when determining risk: personal tolerance and goals. Balancing the two are important to your sanity and investing success.  
  6. Learn from Mistakes. There is a rule of investing for retirement for which there is no exception: you will make mistakes. When you think about managing investments over the course of 30 years or more, you can expect to be perfect. What’s important is how you react to the inevitable and what you learn from it.  
  7. Monitoring Your Investments. Are you up to the challenge of managing your portfolio or are you a candidate for hiring someone to do it? That is the first question you need to answer.  


The 7 Principals for Long-Term Investing can guide you today and for your entire investing future. Over the next several weeks we’ll dive deeper into each, give you questions to consider and include actions you can take now to help you over the long run.  

TAX TIPS – Stay Safe While Shopping Online

While online shopping can be a convenient way to do your holiday shopping, it’s important to keep your information safe. Here are some tips from the IRS to help:

  • Make sure the site you are shopping from is secure. You can tell by looking for “https” in the URL. If there isn’t an “s”, be weary of providing your credit card information. You can also look for a lock icon in the URL bar.
  • Make sure you are using a secure internet connection. Avoid shopping online if you’re using unprotected WiFi, including WiFi networks at the library, work, the mall, or other public places.
  • Look out for phishing emails, which are emails that come from spam accounts pretending to be from a legitimate business.
  • Use unique passwords for each of your accounts and make sure your passwords are strong (at least 12 characters, contain upper and lowercase letters, contain numbers, and contain special characters). Don’t use any personal information in your password, such as your name or family’s names.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.


Tip adapted from IRS[8]  

[8], December 18, 2017

Dow Hits 30,000 – WEEKLY UPDATE – NOVEMBER 30, 2020

The Week on Wall Street

Stocks surged last week, ignited by another COVID-19 vaccine announcement, encouraging economic data, and the easing of political uncertainty.

The Dow Jones Industrial Average rose 2.21%, while the Standard & Poor’s 500 added 2.27%. The Nasdaq Composite index, which has led all year, gained 2.96%. The MSCI EAFE index, which tracks developed overseas stock markets, climbed 1.54%.[1][2][3]

Dow Breaks 30,000

For the third consecutive week, markets opened on Monday to yet another announcement of a potential COVID-19 vaccine.

Stock prices found additional support on news that President-elect Biden would be nominating Janet Yellen, the former Chair of the Federal Reserve, to be Secretary of the Treasury. Investors reacted well to the choice, encouraged by her previously voiced support for greater fiscal stimulus and relieved that a candidate less antagonistic to the industry was selected.

Positive momentum continued into the following day, driving the Dow Jones Industrial Average, S&P 500 index, and the Russell 2000 to record high levels, with the Dow closing above the 30,000 milestone.[4]

Stocks eased off their highs in pre-Thanksgiving trading, though they recovered some of those losses on Friday, as the S&P 500 and NASDAQ Composite closed with fresh record highs.[5]

A Microcosm of the Economy

The economic outlook has been difficult to figure out due to conflicting signals. One day it’s a historic jump in economic growth; another day it’s a record high in new COVID-19 infections. Last week was a good illustration of this. Reports of healthy consumer spending, a solid rise in durable goods orders, and sales of new homes remaining near almost-14-year highs were balanced by a jump in new jobless claims, a decline in household income, and new state and local COVID-related restrictions.[6]

Last week investors chose to see the glass half full and look past the near-term challenges the economy faces.


[1] The Wall Street Journal, November 27, 2020

[2] The Wall Street Journal, November 27, 2020

[3] The Wall Street Journal, November 27, 2020

[4] CNBC, November 24, 2020

[5] The Wall Street Journal, November 27, 2020

[6] The Wall Street Journal, November 25, 2020

Tax Tips – Tips to Protect Yourself From Identity Theft

Tax-related identity theft is when someone uses your personal information to file a fraudulent tax return. They can use information like your Social Security number and other personal details.

Here are some tips to protect yourself:

  • Always use security software on your computer, including anti-virus protection.
  • Use a strong and unique password for each of your online accounts.
  • Look out for spam calls, emails, and texts and report them to the IRS.
  • Protect your information and any of your dependents’ info, as well.

Today’s identity criminals are getting more creative, but you can protect yourself by taking these important steps. Always be careful of who you give your information to.


* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.


Tip adapted from IRS[6]  


[6], March 4, 2020

New Infections Increase Anxiety – WEEKLY UPDATE – NOVEMBER 23, 2020

The Week on Wall Street

Despite news of another COVID-19 vaccine candidate, stocks were mixed amid investor anxiety over an increase in new infections and economic lockdowns.

The Dow Jones Industrial Average fell 0.73%, while the Standard & Poor’s 500 declined 0.77%. The Nasdaq Composite index rose 0.22% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 1.42%.[1][2][3]

Groundhog Week

The announcement of another potential COVID-19 vaccine ignited strong gains to begin the week. But, like the week that preceded it, the gains sparked by the vaccine news were eroded in the following days as worries over the economic impact of new infections moved to the fore.

The market has been grappling with conflicting narratives. One is the optimistic view that, with COVID-19 vaccines apparently near at-hand, the return to economic normalcy grows ever closer.  That hopeful outlook has been offset by anxiety over new infections, rising hospitalizations, and some local and state lockdowns.

These crosscurrents kept stocks range bound for the week, with the technology sector and small and mid-size stocks lending support to the overall market.

Powell Sounds a Warning

In a speech last week, Federal Reserve Chairman Jerome Powell warned that the nationwide increase in COVID-19 cases could hamper economic activity in the upcoming months. He expressed concern that consumer spending may trend lower despite efforts to control the spread of infections.[4]

Powell once again voiced his support for additional fiscal stimulus to assist small businesses, state and local governments, and the unemployed. He also said that even after full economic recovery, some businesses and workers may wrestle with an economic landscape altered by the coronavirus.


[1] The Wall Street Journal, November 20, 2020

[2] The Wall Street Journal, November 20, 2020

[3] The Wall Street Journal, November 20, 2020

[4], November 17, 2020