The Tax Efficient Path to Financial Independence
I’m honored to be the featured guest on this week’s ChooseFI podcast. Brad, Jonathan, and I discussed careers in accounting, my professional journey, and some tax planning. I’m glad to say that I’ll be back on the podcast to discuss tax issues and planning in the future.
I hope you enjoy this episode. It is available at this website, YouTube, and wherever you listen to podcasts. https://www.choosefi.com/how-to-fund-your-childs-roth-ira/
As an employee, your employer’s 401(k) plan can be your most important wealth building tool. Understanding how it functions will help you build your wealth in a tax efficient manner.
A 401(k) plan is established by an employer. The employer provides the account, the account administration, and the investment choices. Usually, the investment options include a menu of stock and bond mutual funds and/or similar investments. In some plans, employer stock is one of the investment choices.
While the employer administers the plan, most of the assets in the plan (see Vesting below) belong the employees in individual accounts. Therefore, the employees, not the employer, enjoy the benefits and burdens of the economic appreciation and/or depreciation of the investments.
401(k) plans are subject to a host of rules, most of which (from a practical perspective) are the concern of the employer, not the employee. One important benefit of the rules for employees is that under ERISA, assets in a 401(k) plan are generally protected from creditors. During your lifetime only two creditors can access assets in your 401(k): the IRS and an ex-spouse.
Contributions to a 401(k) made by the employee (referred to as “employee deferrals” and “after-tax contributions” — see numbers 1 and 3 below) are always immediately “100% vested.” This means that regardless of whether the employee leaves the employment of the employer tomorrow, he or she owns the money he or she contributed to the 401(k) and any related growth.
However, contributions to a 401(k) account made by the employer may be subject to a vesting schedule. Simply put, vesting means amounts become the property of the employee after the employee has been employed by the employer for a certain period of time.
Some plans use a gradual vesting schedule. The least generous of these is as follows:
| Years of Service | Vesting Percentage |
| 2 | 20% |
| 3 | 40% |
| 4 | 60% |
| 5 | 80% |
| 6 | 100% |
More generous (i.e., quicker) vesting is permissible.
Some plans use a “cliff” vesting schedule. This means that employer contributions go from 0% vested to 100% vested when the employee has been employed for a certain period. The longest permissible period is 3 years.
The growth associated with employer contributions is also subject to vesting.
Vesting incentivizes staying with the same employer for a sufficient period of time to capture all of the employer contributions to a 401(k) plan. It can also incentivize returning to a former employer if you have worked a number of vested years of service for them.
Some plans provide for 100% immediate vesting for employer contributions as well as employee contributions.
There are five types of contributions to 401(k) plans, listed below in order of their prevalence (employee deferrals being the most prevalent).
Employees can contribute, through payroll withholding, a portion of their salary to a 401(k) plan. All 401(k) plans offer “traditional” contributions, meaning employees can contribute amounts to the 401(k) plan and exclude those amounts from their taxable income for the year. Some plans, but certainly not all plans, also offer “Roth” contributions, which are not excludible from taxable income, but, if properly withdrawn, can be tax free in the future when withdrawn.
Employee deferrals are the only type of contribution to a 401(k) plan that can be done as a “Roth” contribution. All other contributions are “traditional” contributions.
Read here for more on the desirability of Roth contributions compared to traditional contributions.
Neither traditional nor Roth contributions reduce the amount of income subject to payroll (i.e., Social Security and Medicare) taxes.
Matching contributions are one of the most powerful ways employees can build wealth. Previously, I have written that if you participate in a 401(k) plan with an employer match, you must make it your top wealth building priority to contribute at least enough to your 401(k) to secure all of the employer match.
How does it work? Different employers have varying matching programs. There are two components: 1) the percentage of salary that is matched, and 2) the percentage of the match.
Here is an illustrative example:
Example 1: Elaine Benes works for Pendant Publishing. She is under 50 years old and earns $100,000 in annual W-2 wages. Pendant Publishing matches 100 percent of employee contributions up to 3 percent of salary, and matches 50 percent of employee contributions for the next 2 percent of salary. Based on this matching program, Elaine would be a fool not contribute at least 5 percent of her salary to Pendant Publishing’s 401(k) plan. Doing so will earn her $4,000 of matching contributions from Pendant Publishing on her $5,000 of employee contributions.
Employers vary in terms of when they match contributions. Some employers match employee contributions only once a year (usually at or after year-end). Other employers match employee contributions each pay period. If you work for an employer that does so, you need to be careful not to max-out your 401(k) early in the year, as each pay period requires an employee 401(k) contribution in order to obtain the match. Here is an example:
Example 2: The facts are the same as Example 1. In addition, Pendant Publishing’s matches 401(k) contributions every pay period, and has 24 pay periods per year. Elaine believes it is a good idea to accelerate her 401(k) contributions, and thus contributes $3,750.00 of her salary for each of the first 6 pay periods of the year ($22,500 total) and makes no contributions the rest of the year. For those 6 pay periods she receives an employee match of $166.67 each pay period ($100,000 divided by 24 times 4 percent) for a total annual match of $1,000. By doing this, Elaine misses out on $3,000 of her potential employer 401(k) match, because for the next 18 pay periods, she contributes nothing to her 401(k).
Some 401(k) plans adjust for this and would fully match Elaine’s contribution (in her case, by adding $3,000 to her 401(k) plan), but many do not. In Elaine’s case, she should have stretched out her contribution such that she contributed at least 5 percent of each pay period’s paycheck to her 401(k).
Note that employers are not required to provide a matching program. There are some employer 401(k) plans that provide no match at all.
Tax Treatment: Employer match contributions are traditional contributions. They are not subject to income tax when added to your 401(k), but they will be in the future when withdrawn (as will the growth on matching contributions). Matching contributions are not subject to payroll taxes.
Some 401(k) plans allow for employees to make so-called after-tax contributions to their 401(k) through payroll withholding. These contributions are not excluded from the employee’s taxable income, but do create basis in the 401(k) account. After-tax contributions are what make Mega Backdoor Roth IRA planning possible. Unless one is engaging in Mega Backdoor Roth IRA planning, in most cases after-tax contributions are not advisable.
Tax Treatment: After-tax contributions do not reduce the employee’s taxable income (for both income tax and payroll tax purposes). In the future after-tax contributions are taxable to the employee as withdrawn, but the employee can use the created basis to reduce the income inclusion. Depending on how the 401(k) account is disbursed, that basis recovery may be subject to the Pro-Rata Rule.
Some 401(k) programs have a profit-sharing program, whereby the employer contributes additional amounts to each employee’s 401(k) account based on a formula.
Tax Treatment: Profit-sharing contributions are traditional contributions and are treated in the same manner as matching contributions, including being exempt from payroll tax.
Because of vesting, employees forfeit unvested amounts in their 401(k)s when they leave the employer’s employment prior to fully vesting in the 401(k). When that happens, the unvested amounts must be accounted for. In some plans, the unvested amounts are used to offset plan administrative costs. In other plans, forfeited amounts are added to the remaining participants’ accounts.
Tax Treatment: Forfeitures are traditional contributions and are treated in the same manner as matching contributions, including being exempt from payroll tax.
Contribution limits get a bit complicated because there are two distinct 401(k) plan contribution limits, not one. Numerical limits are updated annually by the IRS to account for inflation. The numbers provided below are the numbers for 2023.
There is an annual employee deferral limitation. For 2023, that limit is the lesser of $22,500 or total compensation (if under age 50) and the lesser of $30,000 or total compensation (if 50 or older). The limit applies to Roth employee contributions, traditional employee contributions, or any combination thereof.
This limit is per person, not per employer. Thus, those with side hustlers must coordinate employee deferrals to their large employer 401(k) plan with employee deferrals to their Solo 401(k). I discuss this topic in detail in my book, Solo 401(k): The Solopreneur’s Retirement Account.
There is a second, less understood limitation on 401(k) contribution. The annual limit for all additions to 401(k) and other employer retirement accounts is the lesser of $66,000 or total compensation (if under age 50) and the lesser of $73,500 or total compensation (if 50 or older).
The all additions limit applies to the sum of numbers 1 through 5 above (employee deferrals through forfeitures) plus a sixth amount. The sixth amount is the amount which is contributed by your employer to another qualified retirement plan account on your behalf.
Some employers offer additional qualified retirement plans. These plans often provide for a contribution to an account by the employer based on a stated percentage of compensation. Employers use various names for these plans. Contributions may be subject to vesting and are traditional contributions that are not subject to payroll tax.
The all additions limit applies per employer, not per employee as the employee deferrals limit does.
Many employers now auto-enroll new employees in a 401(k) plan. This has two components: contribution level and investment choice. In most cases, new employees should not simply settle for auto-enrollment. When you start a job, you should review your new 401(k) plan and make informed decisions regarding contribution level and investment choice.
Auto-enrollment will set a contribution level. Not all employers set the contribution level at a level that maximizes employer matching. Even if the automatic contribution level is set at a level that maximizes the employer match, that level might not be the appropriate level for any particular person.
Plans typically have a default investment plan for new 401(k) participants. It is best to review your investment options when you start a new job and select an appropriate investment allocation for your circumstances.
When a taxpayer is 59 ½ years old or older, they can withdraw amounts in a traditional 401(k) penalty free. Withdrawals are included in taxable income as ordinary income. Beginning at age 72, taxpayers must take out a required minimum distribution (“RMD”) for each year. The RMD is computed based on IRS tables.
If a taxpayer withdraws money from a 401(k) prior to age 59 ½, the withdrawal is not only taxable, it is subject to a 10 percent early withdrawal penalty, unless a penalty exception applies.
Taxpayers may transfer amounts in a 401(k) to another 401(k) to an IRA. Amounts in traditional 401(k)s and IRAs can be converted to Roth accounts. Such conversions create taxable income, but are not subject to the early withdrawal penalty.
Your workplace 401(k) plan is a vitally important wealth building tool. It is important to be an informed user of your 401(k) in order to build tax advantaged wealth.
FI Tax Guy can be your financial planner! Find out more by visiting mullaneyfinancial.com
Follow me on Twitter: @SeanMoneyandTax
This post is for entertainment and educational purposes only. It does not constitute accounting, financial, investment, legal, or tax advice. Please consult with your advisor(s) regarding your personal accounting, financial, investment, legal, and tax matters. Please also refer to the Disclaimer & Warning section found here.
To answer that question, let me posit two hypotheticals:
Hypothetical 1: Mark buys one share of Acme Industries stock for $100 on Monday. The following Monday he sells that share for $100.
Hypothetical 2: Judy buys one share of Kramerica Industries for $20 on Monday. On Thursday, Kramerica Industries announces the release of a new bottle that dispenses both ketchup and mustard, and the stock soars. On the following Monday, Judy sells her share of Kramerica Industries for $100.
What tax result? Do both Mark and Judy have $100 of taxable income? Of course not. We know that Mark has no taxable income and Judy has $80 of taxable income? But how do we know that? The answer: Basis!
Basis is the tax concept that ensures amounts are not taxed twice when they should not be. In Mark’s case, he has no real income when he sells the stock. Judy however, does have income. When she sells the Kramerica stock, she realizes the $80 gain.
Basis is what allows us to measure the appropriate gain or income to the seller of property. While we have a sense that Mark should not have had taxable income and Judy should have, without basis we have no way of measuring whether a disposition of property should trigger a taxable gain, loss, or nothing.
Generally, the basis of an asset is its historic cost, plus any capital improvements or additions made to the asset. In the case of a financial asset in a taxable account, basis is simply the purchase price plus reinvested distributions less any nondividend distributions (returns of capital).
Basis serves another function. Business assets are usually subject to a depreciation allowance on the theory that assets waste away from wear and tear over a useful life. The method and time period for depreciating an asset varies based on the asset. Residential real estate is depreciated in a straight line over 27.5 years. Most non-real estate property is depreciated using an accelerated method and over a shorter period. One business asset that never depreciated is land, on the theory that land has an indefinite useful life.
Each asset is depreciated based on its depreciable basis, which is generally historic cost plus capital improvements. For example, if you purchase a fourth floor residential condominium for $1,000,000 and rent it out, each full year it is used in the rental business you divide the $1,000,000 depreciable basis over 27.5 to come up with a depreciation deduction of $36,364, which lowers the taxable income from the rental activity, and may even be currently deductible against other income if the rental property produces a loss. Note that some of the basis may be attributable to land, which is good basis that can be recovered upon a sale, but it cannot be depreciated.
The tax code offers a tremendous benefit for those looking to facilitate Second Generation FI. The tax basis of inherited assets is “stepped-up” to the fair market value of the asset on the original owner’s date of death. This means, among other things, it is usually much better to leave an asset to an heir at death rather than to gift that asset to an heir during life. The asset left upon death has a stepped-up asset basis, while the gifted asset only has the original owner’s basis in the hands of the recipient.
I previously wrote an example of how this works:
William lives in a house he purchased in 1970 for $50,000. In 2019 the house is worth $950,000. If William gifts the house to his son Alan in 2019, Alan’s basis in the house is $50,000. However, if William leaves the house to Alan at William’s death, Alan’s basis in the house will be the fair market value of the house at William’s death.
Lastly, in order to qualify for the step-up at death, an asset must be held in a taxable account. Assets held in retirement accounts do not receive a step-up at death.
Basis is what makes tax loss harvesting possible. Picture Joey, who owns Blue Company stock worth $10,000. He purchased the stock a year ago for $13,000. He can sell his Blue Company stock and deduct the $3,000 loss on his tax return, realizing a nice benefit.
Tax loss harvesting is a neat tool in the tax planning tool box. But it’s a fools errand to succumb to the “tyranny of tactics” and arrange one’s portfolio around tax loss harvesting. At most, tax loss harvesting reduces your taxable income in any particular year by $3,000. Over the long run, that is not the way to build wealth and achieve financial freedom.
Sure, play the tax loss harvesting card when the right opportunity arises, but don’t structure your portfolio with dozens of holdings in the hopes you can get a $3,000 loss every year. Rather, structure your portfolio with your ultimate goal in mind, and if toward year-end an opportunity to do some tax loss harvesting arises, pounce on it.
The term “basis” means something a bit different in the context of retirement accounts. Two points: First, it is possible to have basis in a traditional account. Generally this means that nondeductible, or “after-tax” contributions have been made to the account, and thus, in the future when there are taxable distributions a portion of the distribution will be offset by that basis.
Second, the assets inside of a retirement account (including a Roth account) do not have basis to the owner of the account. These assets do have basis, but that basis is never directly accessible to the owner of the account (in the way that depreciable basis or stock basis is accessible to the owner). Importantly, assets inside of a retirement account do not enjoy the step-up in basis at the owner’s death that assets in taxable accounts enjoy.
Tax basis is an important attribute to understand as you do tax planning. In two weeks I will build on this post to discuss in detail important implications of tax basis for those pursuing financial independence.
FI Tax Guy can be your financial planner! Find out more by visiting mullaneyfinancial.com
Follow me on Twitter: @SeanMoneyandTax
This post is for entertainment and educational purposes only. It does not constitute accounting, financial, investment, legal, or tax advice. Please consult with your advisor(s) regarding your personal accounting, financial, investment, legal, and tax matters. Please also refer to the Disclaimer & Warning section found here.
If you read enough FI blogs, you will eventually come across the term “Backdoor Roth IRA.” This post answers the question “What’s the deal with Backdoor Roth IRAs?”
Why would someone do a Backdoor Roth IRA? The Backdoor Roth IRA gets money into a Roth IRA in cases where the taxpayer earns too much to make a direct annual contribution to a Roth IRA. Doing the Backdoor Roth IRA gets money that would have been invested in a taxable account into a tax-free Roth account. Further, the money in the Roth account gets better creditor protection than money in a taxable account.
Before 2010, what is now referred to as a Backdoor Roth IRA would have been permissible and/or necessary in only relatively limited circumstances, and then only in years prior to 2008. But a 2006 change in the law opened up the Backdoor Roth IRA in the form we know now (starting in 2010).
Two fundamental concepts must now be addressed. The first is a Roth IRA contribution.
This post discusses Roth IRA contributions in detail. Simplified, U.S. citizens and residents with earned income can make an annual Roth IRA contribution of up to $7,000 in 2024 ($8,000 if 50 or older). Done for many years, it can be a tremendous wealth building tool, since it moves wealth into an account that is tax-free (if properly executed).
The one catch is that your “modified adjusted gross income” (or “MAGI”) must be below a certain threshold in order to make a Roth IRA contribution. To make a full contribution in 2024, your MAGI must be less than $146,000 (if single) or $230,000 (if married filing joint).
Because of these limits, many taxpayers are unable to make a Roth IRA contribution. Further, based on the qualification rules for traditional deductible IRA contributions, most taxpayers unable to make a Roth IRA contribution are also unable to make a deductible traditional IRA contribution.
The second fundamental concept is a Roth IRA conversion. A Roth IRA conversion is a movement of amounts in traditional accounts to a Roth IRA. This creates a taxable event. The amount of the Roth IRA conversion, less any “basis” in the traditional account (more on that later), is taxable as ordinary income on the taxpayer’s tax return.
Prior to 2010, only taxpayers with a modified adjusted gross income of $100,000 or less were allowed to do a Roth IRA conversion. This amount was not indexed for inflation and applied per tax return, making it particularly difficult for many married couples to qualify.
In 2006, Congress changed the law, effective beginning in 2010. As of January 1, 2010, there is no modified adjusted gross income limitation on the ability to do a Roth IRA conversion. The richest, highest earning Americans now qualify to do a Roth IRA conversion just as easily as anyone else.
Okay, so there’s no MAGI limitation on the ability to execute a Roth IRA conversion. So what? Aren’t they taxable? What’s the advantage of doing one?
Recall I mentioned a taxpayer’s basis in a traditional account. Basis in an IRA occurs when a taxpayer makes a nondeductible contribution to a traditional IRA. Here is an example.
Mike expects to earn $300,000 from his W-2 job in 2024, is covered by a workplace 401(k) plan, and expects to have some investment income. Mike has no balance in a traditional IRA, SEP IRA, or SIMPLE IRA.
Mike contributes $7,000 to a traditional IRA on April 20, 2024. The contribution is nondeductible. Because the contribution is nondeductible, Mike gets a $7,000 basis in his traditional IRA. Mike must file a Form 8606 with his 2024 tax return to report the nondeductible contribution.
The “backdoor” opens because of the confluence of two rules: the ability to make a nondeductible traditional IRA contribution and the ability to do a Roth IRA conversion regardless of your income level. Let’s extend Mike’s example a bit.
On May 2, 2024, Mike converts all the money in his traditional IRA to a Roth IRA (a Roth IRA conversion). At that time, Mike’s traditional IRA had a value of $7,011.47.
What result? To start, all $7,011.47 is taxable. All money converted in a Roth IRA conversion is taxable. Uh oh! But there’s good news for Mike. Mike gets to offset the $7,011.47 that is taxable by the $7,000 of basis in his traditional IRA. Thus, this Roth IRA conversion will only increase Mike’s taxable income by $11.47 ($7,011.47 minus $7,000).
The combination of these two separate, independent steps (a nondeductible traditional IRA contribution and a later Roth IRA conversion) is what many now refer to as the Backdoor Roth IRA. Notice this is only possible because of the repeal of the MAGI limitation on Roth IRA conversions. Under the rules effective prior to 2010, Mike would have been allowed to make the nondeductible traditional IRA contribution, but his income (north of $300,000) would have prohibited him from a Roth IRA conversion.
The Backdoor Roth IRA allows Mike to obtain the benefits of an annual Roth IRA contribution without qualifying to make a regular annual Roth IRA contribution.
Any Backdoor Roth IRA planning should involve an additional diligence step: ensuring that as of December 31st of the year of the Roth conversion step, the taxpayer has a zero balance in all traditional IRAs, SEP IRAs, and SIMPLE IRAs. This helps ensure the Backdoor Roth IRA is a tax-efficient tactic.
The Backdoor Roth IRA works well for someone with Mike’s profile. But it does not work well for everyone. Let’s change up the example a bit.
Jennifer’s story is the same as Mike’s story above, except that she had a separate traditional IRA before she did her 2024 nondeductible IRA contribution. That separate IRA had no basis. As of December 31, 2024, that separate traditional IRA was worth $92,988.53.
This one change in facts dramatically increases Jennifer’s taxable income from the Roth IRA conversion. Jennifer must apply the so-called Pro-Rata Rule to the Roth IRA conversion. Even though her two IRAs are in separate accounts, they are treated as one IRA for purposes of determining how much of Jennifer’s $7,000 of basis she recovers upon her Roth IRA conversion.
Jennifer starts with $7,011.47 of income (the amount she converts). To determine the amount of her $7,000 of basis she gets to recover against the proceeds of the Roth IRA conversion, we must multiply that $7,000 times the amount converted ($7,011.47) divided by the sum of the amount converted and her traditional IRA balance at the end of the year ($7,011.47 plus $92,988.53). Thus, Jennifer gets to recover 7.00147 percent of the $7,000 of basis, which is only $490.80. This results in Jennifer’s Roth IRA conversion increasing her taxable income by $6,520.67 ($7,011.47 minus $490.80).
What was a great idea for Mike becomes a horrible idea for Jennifer when she has a significant balance in another traditional IRA.
Note further that Jennifer would have the same bad outcome if that $92,988.53 traditional IRA was instead in a traditional SEP IRA or in a traditional SIMPLE IRA.
Assume Mike did his Roth IRA conversion and did not have any other money in traditional IRAs in 2024. He will get a Form 1099-R from his financial institution. In box 1 it will report a gross distribution of $7,011.47 (the amount of the Roth IRA conversion).
In box 2a the Form 1099-R will say that the “taxable amount” is $7,011.47 and box 2b will be checked to indicate that the “taxable amount not determined.” Wait, what? How can $7,011.47 be the taxable amount while the next box claims the taxable amount is not determined? The answer is the basis concept discussed above.
Mike’s financial institution does not know the rest of Mike’s story (his income, retirement plan coverage at work, IRAs at other institutions, etc.), so it has no way of determining how much basis, if any, Mike recovers when he did the Roth IRA conversion. Box 2b simply means that Mike might have recovered some basis, but the institution is not in a position to determine if he did.
Form 8606 helps complete the tax reporting picture. By filing that form, Mike establishes that he was entitled to $6,000 of traditional IRA basis and how the pro-rata rule applies (if at all) to his Roth IRA conversion. It is important that Mike file a properly completed Form 8606 with his timely-filed 2024 federal income tax return.
When Mike files his 2024 Form 1040, he puts $7,011.47 on line 4a (“IRA distributions”) and $11.47 on line 4b (“Taxable amount”). Most tax return preparation software will round cents to the nearest whole dollar.
Note that failing to report the transactions on the Forms 8606 and 1040 in this way can result in Mike paying an incorrect amount of tax.
This post discusses what you can do if you find yourself in Jennifer’s situation to get a result similar to Mike’s result. I discuss how to properly report a Backdoor Roth IRA on your tax return and what to do if has been incorrectly reported here.
FI Tax Guy can be your financial planner! Find out more by visiting mullaneyfinancial.com
Follow me on Twitter: @SeanMoneyandTax
This post is for entertainment and educational purposes only. It does not constitute accounting, financial, investment, legal, or tax advice. Please consult with your advisor(s) regarding your personal accounting, financial, investment, legal, and tax matters. Please also refer to the Disclaimer & Warning section found here.
I’m not aware that there’s ever been a television show or movie about a financially independent character. However, one particular character strikes me as embodying, if inadvertently, many aspects of FI – Cosmo Kramer of the hit comedy Seinfeld.
Two introductory points. First, I’m an avid fan of Seinfeld, but I’m no expert. I’m sure I’ll miss pertinent information in this post – please feel free to add relevant Seinfeld/Kramer info in the comments.
Second, financial independence is not Cosmo Kramer’s lodestar. Quirkiness is. Many things influenced the character, but none more so than his overwhelming quirkiness, which led to many laughs on the show.
Cosmo Kramer is based on Larry David’s former real life neighbor, Kenny Kramer. Actor Michael Richards put his own spin on the character. The first episodes feature a shut-in motiff for Kramer, but quickly the character became much more social and confident. Kramer believes he’s smarter than everyone else, but he does not brag about it. He simply presents his version of the world as if it is everyone else’s (it’s not).
Kramer does not have a job. In an early episode, The Truth, Kramer claims to not pay taxes. Jerry responds that it is easy not to pay taxes when you don’t have income.
In The Visa, George gives some insight into Kramer’s financial situation. According to George, Kramer’s life is sort of like a fantasy camp, and he reveals the following nuggets about Kramer’s financial life: “Do nothing, fall ass-backwards into money, mooch food off your neighbors.”
Kramer may not be a millionaire. There’s no indication that Kramer simply sold a lucrative business and is now living off the proceeds. Kramer claims not to be a millionaire when he discovers Calvin Klein is selling a perfume called “The Ocean.” Kramer previously pitched a cologne named “The Beach” to Calvin Klein, and complains to Jerry that “I could’ve been a millionaire! I could’ve been a fragrance millionaire, Jerry!” when he believes Calvin Klein stole his idea.
Later, in The Van Buren Boys, Kramer sells his life stories to J. Peterman for $750 and hosts a get-together to celebrate his financial upturn. Even in the 1990’s, few thousandaires (much less millionaires) would assemble their friends to celebrate a $750 score, but Kramer is quirky enough to do it.
Kramer never seems very anxious financially, but on two occasions he doesn’t appear to have the liquidity to pay unexpected bills. In The Diplomat’s Club Kramer runs up a $3,200 debt gambling on airplane arrivals and departures. He calls Newman to provide a unique piece of U.S. Postal Service memorabilia as collateral so he can make one more bet. In The Seven, Jerry bills Kramer for all his mooching. In order to pay the bill, Kramer sells Newman a bicycle for $50. Perhaps when you have trouble covering an unexpected bill for $50 it’s normal to celebrate a $750 financial upturn . . .
Kramer did have a gambling addiction, but it generally appears to be under control throughout the series. During its rare flare-ups, Kramer either gambles with Jerry’s money or uses Newman’s most valuable asset as collateral.
While the show never uses “FI” to describe Kramer, it once featured the character retiring early to Florida. In The Wizard, Kramer retires (from what, the other characters have no idea) to Del Boca Vista after having sold the movie rights to his coffee table book about coffee tables. Sure enough, Florida living doesn’t agree with Kramer, and he moves back to New York. In the next episode, The Burning, Kramer has a part-time job as an actor portraying diseased patients for medical school students.
Little is known about Kramer from prior to the start of the Seinfeld series. He appears to have little particular business knowledge or training. In The Package, Kramer acknowledges that he does not know what a “write off” is. Assessing Kramer’s work product in The Bizarro Jerry, Mr. Leland surmises that Kramer has “no business training at all.”
Kramer is known for mooching off his neighbor Jerry. In The Dealership, he test drives a new car Jerry is considering. Kramer wants to know how long the car can run with the gas gauge on “E,” since he doesn’t “want to be the one responsible for purchasing costly gasoline” when borrowing Jerry’s car. Kramer frequently helps himself to Jerry’s food and beverages, thus keeping his grocery bill low.
Kramer appears to live a relatively low cost lifestyle. He wears vintage clothes and drives older cars. In The Nap he swims in the East River for exercise.
Kramer is not immune from frivolous and/or luxury purchases. He purchases a hot tub for his living room. He enjoys Cuban cigars, though he never pays cash for them. Initially, he obtains them from George (who received them as a gift from Mr. Ross). Later, Kramer barters with the Cuban consulate to obtain cigars in exchange for clothing.
One defining Kramer characteristic is that he’s always up for making some additional income. In The Beard he gladly accepts $50 to pose in a police lineup. In The Rye he drives a friend’s hansom cab in order to make $250 a day. In The Bookstore, Kramer and Newman attempt to operate a rickshaw business in New York. Kramer and Morty Seinfeld sell vintage raincoats in The Raincoats.
Kramer frequently does odd jobs with his friend Mickey Abbott. In The Race, Kramer works as a Coleman’s department store Santa, with Mickey as his elf. In The Burning he and Mickey portray diseased patients for medical school students. In The Stand In he and Mickey work as stand-ins on All My Children. Mickey hooks Kramer up with a seat-filler job at the Tony Awards in The Summer of George.
Kramer is also an arbitrager. In The Bottle Deposit he and Newman collect bottles and cans in New York (where the refund is 5 cents a bottle and can) and plan to drive them to Michigan to collect a 10 cent refund per bottle and can. They joyfully sing “at ten cents a bottle and ten cents a can we’re pulling in $500 a man!!!”
None of these pursuits are what we would call a side-hustle. They are very “one-off” and do not create a consistent stream of income. To my mind, a great modern Seinfeld episode plot would be Kramer offering his services on Fiverr – that would give him odd jobs where hilarity would ensue.
In a three episode arc spanning from the end of Season 3 to the beginning of Season 4, Kramer moves to Los Angeles to pursue a Hollywood career. His motivation appears to be two-fold. He’s angry with Jerry over a dispute regarding spare keys, and he is genuinely interested in becoming an actor and producer. Kramer hitch hikes (after his car breaks down) and lives in a rather dilapidated apartment. He certainly isn’t flush with money in California, but he’s willing to sacrifice to pursue his Hollywood dream. Kramer’s is able to follow his dream because he is so financially independent.
In The Voice, Kramer establishes a corporation (Kramerica Industries), hires an intern, and earnestly attempts to invent a bladder system for tankers to prevent oil spills. He and his intern Darren even do some ill-fated research and development on the concept. When the idea fails, Kramer suggests an alternative invention – a bottle that dispenses both ketchup and mustard.
The Strike, known most for its Festivus angle, is where Kramer is at his most and at his least FI. Kramer receives a call that the strike is over. Apparently, he was an employee of H&H Bagels. Over a decade ago Kramer went on strike for $5.35 an hour. Since the minimum wage recently increased to $5.35 an hour, Kramer ends his strike and goes back to work. It’s the rare occasion where Kramer puts work ahead of his everyday quirky life, and his mindlessly going to work just because they now pay $5.35 an hour strikes me as very un-FI.
Later that episode, Kramer acts in a more FI manner. He strikes when his boss won’t let him take off to celebrate Festivus. Prioritizing Festivus over work is very FI (although obviously it’s much more quirky than it is FI). That said, simply leaving the job, instead of staging a strike and picketing, is the more FI path. Kramer eventually ends his strike, but not because of financial concerns. He caved because he really had to go to the bathroom.
It’s hard to understand why Kramer does not need to have a steady job and yet is quite comfortable. He certainly does not seem to have had a lucrative career, and he’s too young to be a pensioner. One would think the show would have mentioned it if he won the lottery. In The Maestro, Jerry tells Kramer that he’s surprised Kramer is “so litigious.” That quote seemingly rules out Kramer being the beneficiary of a lawsuit judgment or large settlement.
My best guess is that Kramer is the beneficiary of a trust, perhaps established by his father, an aunt or an uncle, or a grandparent. He has access to money, but his difficulty with coming up with money in a pinch in The Diplomat’s Club and The Seven indicates that perhaps he receives income to support himself but does not have access to significant assets. Thus, my best working theory is that Kramer is the beneficiary of a trust or otherwise has access to a stream of income, one that is sufficient but not overly generous. In terms of assets and liabilities, it appears that Kramer probably has a relatively modest amount of assets and little in the way of liabilities.
Do you agree that Kramer embodies many aspects of FI? Are there other fictional characters that are financially independent?
Photo of Michael Richards by Alan Light
Last week’s post addressed the concept of tax loss harvesting – selling stock or securities (in a taxable account) to create a beneficial tax loss. This post addresses tax gain harvesting – selling stock or securities (in a taxable account) to create a beneficial tax gain.
Beneficial tax gain? How could it be good to create a taxable gain?
Fortunately, not all taxable gains create federal income tax. Below I discuss two scenarios where incurring a taxable gain may not increase a taxpayer’s current tax liability and would have other favorable consequences.
Under current law, some taxpayers pay a 0% federal income tax rate on long-term capital gains. Based on the new tax numbers effective after tax reform, more and more taxpayers will find themselves in relatively low marginal tax brackets.
Single taxpayers with a taxable income of $39,475 or less and married filing joint (“MFJ”) taxpayers with a taxable income of $78,950 are currently (using 2019 numbers) subject to a 0 percent federal long-term capital gains tax rate. Because the calculation is based on taxable income and not adjusted gross income, taxpayers get the benefit of the standard deduction (or itemized deductions, if greater). Thus, single taxpayers with adjusted gross income of $51,675 (including a standard deduction of $12,200) or less and MFJ taxpayers with an adjusted gross income of $103,350 (including the $24,400 standard deduction) or less qualify for the 0% federal capital gains.
This presents a great planning opportunity if the taxpayer has an appreciated security (such as a stock, bond, mutual fund, or ETF). Here is an illustrative example:
Example 1: Joe and Mary file their 2019 tax return MFJ. In 2019 Joe and Mary will together have $81,000 of W-2 wages. They have $1,000 of interest and dividends. They take the standard deduction (which is $24,400 for MFJ in 2019). Thus, their 2019 taxable income is $57,600 ($81,000 plus $1,000 less $24,400). Assume Joe and Mary own 100 shares of Acme Corp., which they purchased five years ago for $10 per share ($1,000 total). Assume further that the stock is worth $11,000 on December 1, 2019. Joe and Mary could sell the stock on December 1st, realize a taxable gain of $10,000 ($11,000 less $1,000 cost basis), thus increasing their taxable income to $67,600.
Since their taxable income is still $78,950 or less, the entire $10,000 capital gain is subject to the 0 percent federal capital gains tax. This result obtains regardless of whether Joe and Mary purchase 100 Acme shares two days later for $11,000. Unlike tax loss harvesting, which is subject to the wash sale rules, there are no wash sale rules as applied to taxable gains.
Why might Joe and Mary sell at a tax-free gain and then repurchase? While they don’t pay tax, they don’t save on their 2019 taxes. However, the sale/repurchase significantly increases their tax basis and decreases the taxable gain they will have on a future sale of Acme stock. There’s no way to know if a future sale of Acme stock will be subject to a 0 percent federal capital gains tax rate. By tax gain harvesting, Joe and Mary have dramatically increased their basis in the Acme stock from $1,000 to $11,000 tax-free. Thus, a future taxable sale will incur much less tax.
If, alternatively, Joe and Mary decide that they want to exit their Acme stock holding (thinking that perhaps its meteoric rise has concluded), tax gain harvesting provides them with a tax-free exit. Tax gain harvesting, if you qualify for a 0 percent capital gains tax rate, provides a way to reallocate your portfolio’s holdings without paying federal capital gains tax on appreciated holdings.
Three caveats about tax gain harvesting are worth mentioning. First, the determination of whether your taxable income is low enough to qualify for the 0 percent capital gains rate includes the gain itself. Referencing Joe and Mary, if instead of $81,000 of W-2 wages, they had $100,000 of W-2 wages, their tax gain harvesting opportunity is dramatically decreased. In this case, their taxable income before the gain ($76,700 – computed as $100,000 plus $1,000 less $24,400)) appears to qualify for the 0 percent capital gains rate, once you add the $10,000 gain, the taxable income is $86,600, and the gain no longer qualifies for the 0 percent capital gains tax rate.
Second, the gain causes your “adjusted gross income” and “modified adjusted gross income” to increase, and thus have negative consequences on other preferential tax items, including deductions, credits, and qualifying for certain tax benefits. In some cases it may be worth it to run the numbers through a tax forecasting program and/or consult with a professional advisor before pulling the trigger to help understand the impacts on other parts of your tax picture.
Third, state income taxes must always be considered when tax gain harvesting. There are some states that impose no income tax, and thus there’s no problem. But in most states there is an income tax, and there’s no preferential rate for capital gains. States generally tax capital gains like any other type of income. Thus, there can be a (usually small) state income tax on capital gains triggered through tax gain harvesting.
Depending on the state, the tax rate on the harvested gain might be small enough to make tax gain harvesting still well worth it. In any event, it is always advisable to consider what the state income tax effects of potential tax gain harvesting will be before pulling the trigger.
Another time it may be worth it to tax gain harvest is when you already have incurred a significant taxable loss during the taxable year. Here is an illustrative example:
Example 2: In March 2019, Eileen sold shares of the XYZ Mutual Fund and realized a $13,000 capital loss. She has no other capital gains or losses in 2019. If she does nothing else, she will be able to deduct $3,000 of the loss against her ordinary income and carryforward $10,000 of the capital loss to 2019. If Eileen owns shares in the ABC Mutual Fund with a $10,000 built-in gain, she could sell those shares in December 2019, incur no marginal federal or state income tax, and still claim a $3,000 capital loss on her 2019 federal income tax return.
Eileen is now positioned to realize the benefits of tax gain harvesting. She can either restructure her portfolio in 2019 with no additional tax cost on the ABC Mutual Fund gain, or can repurchase ABC Mutual Fund shares shortly after the sale and increase her basis by $10,000.
It is worthwhile to note that by tax gain harvesting here, Eileen does cost herself in tax in the future, since she won’t have the $10,000 capital loss carryforward to use to offset future capital gains (and up to $3,000 in ordinary income) in 2020 and beyond. Thus, tax gain harvesting to offset current year capital losses involves tradeoffs, and taxpayers considering it are often well advised to run the numbers through a tax forecasting program and/or consult with a professional advisor before pulling the trigger.
Those with appreciated assets in taxable accounts should consider tax gain harvesting. One or both of the following need to be true: the taxpayer is in a relatively low tax bracket or has a capital loss in the current taxable year. If either or both are true, there may be an opportunity to save on future capital gains taxes and/or restructure a portfolio at no or low tax cost. As always, it is best to run the numbers and/or consult with a professional advisor before pulling the trigger.
FI Tax Guy can be your financial planner! Find out more by visiting mullaneyfinancial.com
Follow me on Twitter: @SeanMoneyandTax
This post is for entertainment and educational purposes only. It does not constitute accounting, financial, investment, legal, or tax advice. Please consult with your advisor(s) regarding your personal accounting, financial, investment, legal, and tax matters. Please also refer to the Disclaimer & Warning section found here.
If you have individual stocks or other securities that have a loss in them, you may have a tax planning opportunity: tax loss harvesting.
First off, it is important to keep in mind that tax loss harvesting only applies to assets (such as stocks, bonds, mutual funds, ETFs, etc.) in taxable accounts. It does not apply to assets in retirement accounts and health savings accounts.
If you have assets in taxable accounts that have declined in value relative to your purchase price, you have an opportunity to tax loss harvest. Here’s a basic example:
Example 1: Mark purchased 100 shares of Kramerica stock two years ago for $100 a share ($10,000 total). Based on a disappointing test of an oil-tanker bladder system, Kramerica’s stock is now worth $70 per share. If Mark sells all 100 shares for $70, his total basis in the stock ($10,000) exceeds the amount he realizes on the sale ($7,000) by $3,000.
In Mark’s case, he has a $3,000 capital loss for tax purposes. Capital gains and losses from the sale of property (for most individuals, from securities) are different for tax purposes than other types of income, such as wages, rents, self-employment income, interest, and dividends (collectively, usually referred to as “ordinary income”). Federal income tax law does two things to capital gains and losses. First, it taxes capital gains at a lower tax rate than most other types of income. Second, and most importantly for the purposes of tax loss harvesting, it limits the ability of a capital loss to offset ordinary income.
Capital losses, such as Mark’s loss on Kramerica stock, can offset either capital gains or ordinary income, but only to the extent of $3,000 ($1,500 if the taxpayer files married filing separate) of ordinary income a year.
Thus, tax loss harvesting is a great play in two situations:
A second example can illustrate the first situation.
Example 2: Lucy sells stock with a historic cost basis of $30,000 for $50,000 in March. Thus, she will have to report a $20,000 capital gain on her tax return. If, however, Lucy has another stock/bond/mutual fund/ETF with a historic cost of $100,000 and a fair market value of $80,000, and she sells it by year-end, she will harvest the $20,000 loss in time to offset the previous $20,000 gain.
Taxpayers with significant capital gains during a year should review their taxable accounts towards year-end to see if there are any opportunities to harvest losses and offset existing capital gains.
For those taxpayers without capital gains, there still can be some opportunity to tax loss harvest.
Example 3: Edward anticipates making approximately $100,000 in 2021 in wages from his employer. If Edward can identify a stock/bond/mutual-fund/ETF with a built-in loss, he can sell the security and reduce his taxable income up to the lesser of the loss or $3,000 in 2021. If Edward owns the XYZ mutual fund with a historic basis of $5,000 and a current value of $2,000, he can sell it before year-end and reduce his taxable ordinary income from approximately $100,000 to approximately $97,000. The capital loss deduction is one taken on the first page of the Form 1040 and is not an “itemized deduction.” Thus, Edward gets the deduction regardless of whether he itemizes his deductions.
Note that Edward is limited in his ability to deduct capital losses in any one taxable year to $3,000. Let’s slightly revise the previous example.
Example 3A: The facts are the same as in Example 3, except the the stock Edward sells has a basis of $10,000. Thus, Edward’s current year capital loss is $8,000 ($10,000 basis less $2,000 sales price) instead of $3,000. However, Edward still can only deduct $3,000 because of the limit on taking capital losses against ordinary income. Thus, Edward’s 2021 taxable income is still approximately $97,000.
Edward can carry forward the excess unused capital loss ($5,000, which is the $8,000 actual loss less the $3,000 used loss) into future tax years. Thus, in 2022, he can offset capital gains and up to $3,000 of ordinary income by the $5,000 capital loss carried forward. If Edward has no capital gains or losses in 2022, he can deduct $3,000 of the $5,000 against his 2022 ordinary income, and then carryforward a $2,000 capital loss into 2023. Edward carries forward the capital loss until it is fully used.
Tax loss harvesting sounds great, right? But with tax, there’s almost always a catch, and one exists here. The so-called “wash sale” rules.
They are best understood by understanding the concern they address. Say in our first Example Mark sells his 100 shares of Kramerica stock on December 15th to trigger the capital loss. Then on December 16th Mark buys 100 shares of Kramerica stock. Absent the wash sale rules, Mark has had no change in his overall economic position (he still owns 100 shares of Kramerica) yet he’s realized a $3,000 capital loss for tax purposes.
The wash sale rules step in to prevent this sort of gamesmanship. They disallow any loss on the sale of securities when the taxpayer buys the same or similar securities within the period starting 30 days before the loss sale and going through 30 days after the loss sale. The rule applies broadly. It applies to similar securities — for example, selling Vanguard’s S&P 500 index mutual fund at a loss and buying Fidelity’s S&P 500 index mutual fund. It applies to purchases of the same or similar securities by the taxpayer, the taxpayer’s spouse, and by entities controlled by the taxpayer and the taxpayer’s spouse. It can also potentially apply to purchases inside retirement accounts. The wash sale rule also bites to the extent of shares purchased through a dividend reinvestment program where the reinvestment occurs within the 61 day window described above.
Tax loss harvesting provides taxpayers a great opportunity to offset capital gains and possibly up to $3,000 of ordinary income. To work effectively for 2021, taxpayers must sell loss securities by December 31st and must be careful to avoid repurchasing the same or similar securities in a manner that triggers the wash sale rules and disallows the capital loss.
FI Tax Guy can be your financial planner! Find out more by visiting mullaneyfinancial.com
Follow me on Twitter: @SeanMoneyandTax
This post is for entertainment and educational purposes only. It does not constitute accounting, financial, investment, legal, or tax advice. Please consult with your advisor(s) regarding your personal accounting, financial, investment, legal, and tax matters. Please also refer to the Disclaimer & Warning section found here.
Tax is a crucial consideration for those with small businesses and side hustles. A new tax provision, Section 199A, passed as part of Tax Reform in December 2017, gives many small business owners and side hustlers a deduction determined with respect to their “qualified business income” (or “QBI”).
So what’s going on? Why would you get a tax deduction for a certain type of income? The short answer is that the Section 199A deduction was needed to help level the playing field for small businesses (especially manufacturers) vis-à-vis large corporations. Tax Reform cut taxes for corporations (generally from 35 percent to 21 percent). To keep small businesses, many of which are taxed on individual tax returns at federal rates up to 37 percent, competitive with larger corporations, Congress enacted a partial deduction for qualified business income. The deduction has the effect of lowering the federal income tax rate on that income.
The QBI deduction also applies to so-called Section 199A dividends. Please see the discussion further below regarding Section 199A dividends.
The bad news is that, even for a tax rule, Section 199A is incredibly complex. The much better news is that most of that complexity applies to about 10 percent or less of taxpayers. For 90 plus percent of taxpayers, it isn’t too complicated!
To figure out if it is going to be complicated for you, ask yourself one question (all amounts as applicable for 2021):
If you’re married filing a joint tax return (“MFJ”), change the question to
For 2020, apply the above questions with $163,300 for single taxpayers and heads of household, and $326,600 for MFJ taxpayers. For 2021, married filing separate taxpayers use $164,925 as their number.
Remember, the key number is taxable income. Taxable income is your adjusted gross income less your standard deduction ($12,550 in 2021 for singles, $18,800 for heads of householder, and $25,100 for MFJ) or your itemized deductions. So if you take the standard deduction, you’re looking at adjusted gross income of $177,450 for singles, $183,725 for heads of household, and $354,900 for MFJ filers. Those are high thresholds for most Americans and for most of those seeking financial independence).
If you answered Yes to your bolded question, your Section 199A deduction is computed based on a relatively simple (for tax) calculation. Your Section 199A deduction is the lesser of
Here are two examples to illustrate the calculation (all examples avoid discussing self-employment tax for ease of illustration):
Example 1: Phil has $100,000 of W-2 wage income, $1,000 of QDI from mutual funds owned in taxable accounts, makes $10,000 from a trade or business side hustle reported on Schedule C, and claims the standard deduction on his tax return. Phil’s Section 199A deduction is the lesser of
Thus, Phil’s Section 199A deduction is $2,000, fully 20 percent of his side hustle income.
Example 2: Mary owns a sole proprietorship engaged in a domestic trade or business which earned $100,000 this year reported on Schedule C. Mary also earned $1,000 of QDI from mutual funds owned in taxable accounts and claims the standard deduction on her tax return. Mary’s Section 199A deduction is the lesser of
Thus, Mary’s Section 199A deduction is $17,600, 17.6 percent of her sole proprietorship income.
Section 199A is great news for side hustlers and pretty good news for sole proprietors and other owners of flow-through businesses. Why the slight benefit reduction for our sole proprietor? The answer lies in the benefit of the standard deduction (or itemized deductions, if applicable). Since Mary already had the standard deduction protecting some of her QBI from full taxation, the Section 199A deduction was reduced to account for that benefit.
Note that if Mary had another source of income (other than long-term capital gains or qualified dividend income), such as a Roth conversion amount, or a spouse with income, that income would increase her taxable income limitation and she could qualify for up-to the full 20 percent QDI deduction.
Now that we have the calculation illustrated, we must ask what is “qualified business income” (“QBI”)? Generally, QBI is domestic income from a trade or business (as defined under normal U.S. tax principles) received by a sole proprietor or by an individual from a “flow-through” business (a partnership, LLC, S-corporation, trust, or estate). Some important considerations:
What if you answered No to your question? If you have QBI, you’re likely to need the assistance of a qualified tax professional. The rules get complicated quickly. For those with taxable income above $164,900 ($329,800 for MFJ, $164,925 for MFS), their Section 199A deduction is subject to a limitation and possibly a second additional limitation, as follows:
The preamble to the proposed regulations states that a “specified service trade or business” is (1) any trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners, and (2) any trade or business that involves the performance of services that consist of investing and investment management, trading, or dealing in securities . . . partnership interests, or commodities.”
The general idea behind the specified service trade or business is that Congress wanted to prevent high earning doctors, lawyers, accountants, etc., from benefiting from Section 199A. Congress intended for the benefits to generally go to manufacturers. Manufacturers will generally find themselves only subject to the first limitation, and many will have buildings and equipment with tax basis and/or will pay significant W-2 wages to employees and thus will not find the limitation to have much effect.
For those subject to these complex limitations, there can be significant benefits from doing planning and restructuring with the assistance of qualified tax advisors to maximize their Section 199A deduction. Such planning can include planning to increase current year tax deductions (through, for example, increased retirement plan contributions) to reduce taxable income below the relevant testing thresholds.
Qualified dividends from real estate investment trusts (“REITs”) (Section 199A dividends) and ordinary income from publicly traded partnerships qualify for the Section 199A deduction. There is no need for the taxpayer to be in a trade or business and there are no limitations based on taxable income. In terms of sheer volume, I expect more returns will claim this Section 199A QBI deduction than the QBI deduction for “normal” qualified business income discussed above.
It is important to note that dividends and other income received in tax advantaged accounts (IRAs, 401(k)s, HSAs, other retirement accounts) does not qualify for the Section 199A deduction.
Taxpayers report their QBI deduction on either a Form 8995 or a Form 8995-A (for the 2019 tax year and later). Box 5 of Form 1099-DIV (Section 199A dividends) reports the dividends that qualify for the QBI deduction.
I published a more detailed Section 199A post here. It provides more examples of the application of Section 199A.
I published a post discussing the Section 199A QBI deduction and how the concept interacts with small business retirement plans (click here).
I published a post on a potential planning opportunity available to some self-employed individuals to capitalize on the interplay of self-employed income, Roth conversions, and the Section 199A deduction here.
FI Tax Guy can be your financial advisor! Find out more by visiting mullaneyfinancial.com
Follow me on Twitter: @SeanMoneyandTax
This posting is for entertainment and educational purposes only. It does not constitute accounting, financial, legal, or tax advice. Please consult with your advisor(s) regarding your personal accounting, financial, legal, and tax matters. Please also refer to the Disclaimer & Warning section found here.