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3 Tax Woes and How to Survive Them

3 Tax Woes and How to Survive ThemThe tax deadline is roughly two weeks away. But if you’re going to be late in filing, can’t pay all of what you owe or have the fear that you might be audited, don’t panic. We’ve got you covered with some smart ways to handle these three, potentially scary scenarios.

Late Filing

Of course, if you owe, make every effort to file as soon as possible to avoid penalties and interest. But the good news is, if you’re owed a refund, there’s no penalty for filing late. More good news: For those who qualify, Free File is still available on IRS.gov through Oct. 15 to prepare and file returns electronically. There’s more: If you have a history of paying on time and are missing this year’s deadline, there’s always Penalty Relief.This provision, called First Time Penalty Abatement, allows you to qualify if, a) You haven’t previously filed a return, or if you have had penalties in the past, you have no penalties for the three years prior to filing this year; b) You filed all currently required returns or filed an extension; c) You have paid, or arranged to pay any tax due. See? There’s hope.

Can’t Pay All of What You Owe?

Due to the Tax Cuts and Jobs Act, you might find that you owe because you didn’t change your withholding, as well as the fact that the law eliminated exemptions, increased child credits and limited popular deductions, to name a few of the changes. Not to worry. If you’re stuck and need help, you’ll be relieved to know that you can apply online for a Payment Plan. While you’re settling your debt, you can view your balance online and pay with IRS Direct Pay or by a debit or credit card.

If you need further assistance, consult a professional. If this is any consolation, the Government Accountability Office estimated in a report last summer that about 30 million workers had too little withheld from their paychecks. While this increased their take home pay, it also increased their tax liability. Again, consult a tax professional if you have questions, but remember: there is light at the end of the tunnel. You will get out of this.

If You Get Audited

The truth is, unless your income is super high, you have less than a one percent chance of being audited. That said, if this does happen, you’ll want to be prepared. But first, a little education. There are three kinds of audits, a) Correspondence Audit: The simplest kind and it’s usually the result of you making a mistake on your return; b) Office Audit: This one is more complicated. You’ll need to go into an IRS office with required paperwork, but the bigger thing to keep in mind is that this kind of audit could be a result of some high tax deduction like, say, a large medical expense; and c) Field Audit: This one is similar to an Office Audit; however, this time, the IRS comes to you and asks to see your records.

No matter the type of audit, don’t freak out. Simply take a deep breath, and gather all your documents: W-2s, 1099s, bank statements, proof of income, investment statements, along with bills, receipts and other proof of expenses. Next, schedule your audit or postpone it. Then, keep a cool head and strive to be compliant with IRS representatives because, after all, they are just doing their job. However, the very best option is to call a tax professional. He or she will know exactly what to do and walk you through this sometimes hairy process.

So there you have it. There are ways to survive the situations that you might have around filing your taxes. The motto to keep in mind? This, too, shall pass.






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How 3D Printing Can Enhance Your Business

How 3D Printing Can Enhance Your BusinessThere will likely always be a need for a traditional paper printer, but there’s also a growing case that 3D printers may one day become commonplace in the average small business office. Consider the way that desktop publishing became mainstreamed, allowing small business owners to create their own marketing materials. New 3D printers offer a similar advantage by producing physical objects customized with your message.

3D printing places complex manufacturing techniques and machinery right at your desktop. As the technology grows less sophisticated and less expensive, we will see more small businesses taking advantage of it. A desktop 3D printer can create objects of up to 5.5-inches-by-5.5-inches-by-5.5-inches in size, on a platform built within the device, in a variety of colors.

Specifically, a 3D printer can manufacture a three-dimensional object such as a keychain, smartphone case or some other type of promotional item. The advantage is similar to today’s equivalent of small run digital print jobs, where you can place a customized message on each product.

The biggest hitch to widespread use is that a 3D printer needs a blueprint of the object’s manufacturing specifications. The printer allows you to download a model of product blueprints, which are likely to become more available as the technology becomes more prevalent. There’s also the issue of equipping the 3D printer with the correct material to “print” a product, which is generally less accessible than standard printer paper.

However, the applications are limited only as far as one’s imagination. For example, instead of ordering 500 stadium cups or luggage tags, you can customize one at a time for each prospect or client. Imagine how much easier it would be for an architectural firm to print (instead of hand-build) 3D models of its building designs based on blueprints they’ve already drawn. Firms can replace broken machinery parts onsite rather than waiting days or weeks for a replacement.

Whether for home or business, a 3D printer can help you test-drive a new invention of your own. While great ideas abound conceptually, the ability to design a product and test its efficacy can be the difference between a dreamer and marketable new business idea. By creating 3D models of a new product, an entrepreneur can demonstrate the product to potential angel investors or venture capitalists, show it off at trade shows, and even custom print them for sale.

3D printing opens up new possibilities for producing items for small business owners, such as promotional items, new products or replacing machine parts. Prices of 3D printers continue to come down (starting at less than $1,000) and can be bought at places like Staples Office Supply and Lowe’s Home Improvement – where you also can pick up requisite printing materials. Or, purchase 3D printing services available online or onsite at some stores (such as a Staples 3D Printing Experience Center) if you want to try out the technology without investing in the actual machinery.

Just as desktop publishing brought low-cost marketing to individual firms, small businesses may soon find 3D printing an indispensable part of their office operation.

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Trump Tax Law Makes Now the Perfect Time for the Roth Conversion Retirement Trick

Roth ConversionConverting a traditional IRA to a Roth IRA takes some fortitude and faith in the future numbers because this change can accelerate your tax bill. The current market and tax rate cuts from President Trump’s plan, however, are creating an environment ripe for conversions and making the move much more palatable. Together, these two factors are essentially creating new groups of taxpayers for whom a conversion makes good sense.

IRA Basics Revisited

Contributing to a traditional IRA gets you a tax deduction now, at the time of your contribution and allows your money to grow tax free. You’ll also need to begin withdrawing your annual required minimum distributions (RMDs) once you hit age 70½, with whatever you take out taxed as ordinary income. Roth IRAs operate differently, as your contribution is made with after tax income but in return your investments grow tax-free and you pay no tax when you finally withdraw the money.

Roth Conversion Mechanics

Under a conversion you choose to pay tax at the time of the conversion on the money in the traditional IRA and transform the account into a Roth, making all future gains and withdrawals free from taxation. The ability to convert was limited for many people, however, because back when Congress created Roth IRAs, there were income limits above which the conversion was not allowed. In 2010, the government removed the income restrictions on conversions and now anyone can make a conversion.

Running the Numbers

Understanding if making a conversion is worthwhile requires calculations that depend on assumptions of tax rates in the future and investment performance. Generally, if you believe your investments will be worth more and the tax rates will be higher when you withdraw the money, then a conversion makes sense.

Benefiting from the arbitrage on tax rates between now and the future often requires spacing out the conversion over multiple years. The idea is to convert just enough out of the traditional IRA to raise your income until it’s just below the next higher tax bracket. The recent tax cuts to individual rates make the conversion option a lot clearer as they both cut rates and expanded tax brackets.

Finding the Sweet Spot

Under the previous tax law, the sweet spot for many people was after retirement but while they were still under 70 and not yet taking RMDs. The widening of the 24 percent bracket means that the sweet spot for converting will extend to a greater number of taxpayers, both younger and older.

No Second Chances

The new law cut out the ability to “recharacterize” conversions. Recharacterization allowed taxpayers to unwind a Roth conversion any time before Oct. 15 the year after you convert. The idea is that if you convert $250,000 at the beginning of the year and then the market drops dramatically (like in 2008 when the S&P 500 fell almost 40 percent) you could unwind the conversion and do it again later when the balance is lower (and therefore your tax bill from the conversion as well). There are no more do-overs under the current tax law.

One strategy to mitigate this risk is to convert specific investments first if you are looking at a multi-year conversion strategy, focusing on those that are performing the worst. The idea is that they are more likely to go up in the future, like when you rebalance a portfolio to harvest your best performers and buy more of those that are down. Another strategy is to take a cost-averaging strategy to conversion.


In the end, the real payoff comes not from market timing, but from making the conversion and allowing the money to grow tax-free for decades, taking advantage of the power of compounding and then reaping the rewards tax free. If you have assets in a traditional IRA, now may be a good time to talk with a financial planner to see if a Roth conversion is the right move for you.

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What is the Forecast for Job Creation in 2019?

Forecast for Job Creation in 2019According to a March 12, 2019 publication of the Bureau of Labor Statistics’ TED: The Economics Daily, the February employment report did not report show a lot of jobs for the U.S. economy. Based on the report and averaging all sectors, only 20,000 jobs were gained during February 2019.

Looking deeper at the individual sectors, the picture is more varied. “Professional and business services gained ” 42,000 jobs during February. Similarly, “wholesale trade employment” maintained it’s positive gains of 11,000 jobs during the same time-frame. However, the construction industry saw a loss of 31,000 jobs during February, despite gaining 53,000 jobs during in January 2019. Other sectors, such as retail, mining and the government, saw limited movement in job gains or losses. This is comparable to manufacturing’s small gain of 4,000 jobs during the February time-frame.  Other sectors, such as manufacturing’s small gain of 4,000 jobs during February 2019, is like the other notable sectors included in the report.   

Domestic Production Considerations

Looking at how the tariffs have impacted employment, the Economic Policy Institute (EPI) gives provides insight as to how much the global economy has impacted U.S. aluminum production. From 2010 to 2017, 23 working aluminum smelters dropped to five5. This set of closures sawresulted in the disappearance of 13,000 jobs disappear. Similarly, 2017 saw single only one alumina refinery standingoperating, after down from three in 2016 had three operating.

During the investigation by the U.S. Department of Commerce and the Executive branch branch into whether aluminum imports were a national security threat, global economic forces were putting the squeeze on domestic production. From 2000 to 2017, China’s “primary aluminum production capacity” grew 1,500 percent, while as well as accounting for 82 percent of additional global aluminum production.

Along with smelters in India and the Persian Gulf, Chinese producers also received government subsidies. By ex-U.S. producers lowering the London Metal Exchange (LME) price for aluminum to unprofitable levels, coupled with China’s aluminum production expanding during the same time, 18 American smelters shuttered and 13,000 positions were eliminated from the industry.

Mixed Outlook Based Upon Tariffs

Michael Sposi and Kelvinder Virdi, research analysts with the Looking to the Federal Reserve Bank of Dallas, featured authors Michael Sposi and Kelvinder Virdi looked at how tariffs will impact both producers and consumers of steel and aluminum. 2016 statistics found revealed that approximately 300,000 people (two-tenths of one percent of all workers in America) work in both businesses. It’s important to note the March 2018 tariffs on steel and aluminum are not applicable under existing NAFTA agreements.

The two authors analysts explain that it’s important to consider that ways the same steel and aluminum is are critical to other segments of the economy (construction, car producers, machinists, etc.). Tariffs are projected to reduce the nation’s overall gross domestic product by as much as one-quarter of one-percent. This is due to fewer items produced and sold to ex-U.S. markets because of the increased material costs.

Virdi and Sposi note there’s a projected 5 five percent reduction in imports. This is coupled with higher-costing domestically produced metals, estimated to cost 21 percent more than pre-tariff prices for imported steel and aluminum.

Virdi and Sposi’sTheir report, titled “Steeling the U.S. Economy for the Impacts of Tariffs,” found that when it comes to the “machines and equipment sector,” which uses the most metal, this industry would see experience an increase in input costs. This pressure would reduce competitiveness against international competitors and lower demand throughout America, reducing industry-wide production by 2.66 percent, along with a 2.63 percent drop in exports. However, it’s noteworthy to see how tariffs can also stimulate employment.

As part of the U.S. Commerce Department’s Section 232 investigation to see if importation of steel and aluminum can negatively impact national security, the resulting imposition of tariffs onf imported steel and aluminum have led to American producers to hire more workers. By increasing domestic aluminum production by a half-million tons annually by the end of 2018, it has been projected to inject $100 million of capital expenditure and create 1,000 new positions. Between reopening facilities and additional production, 300 jobs were generated from February to October 2018 alone, and up to 3,000 going forward.   

While there’s no certain projection for the rest of 2019’s employment picture, what happens on the international trade stage will undoubtedly have a lasting impact on domestic employment. 

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How to Determine a Business’ Health by its Net Profit Margin

Net Profit MarginWhen it comes to figuring out a company’s net profit margin, this calculation gives a business and its financial officers a much better picture of the company’s profitability.

Defining Net Profit Margin

Net profit margin determines the percentage of revenue that ends up as profit after expenses are accounted for. Represented as a percentage, it’s determined calculated by taking the company’s net profit divided and dividing it by the entire revenue.

Looking at the Formula Itself

When it comes to calculating the net profit, it goes beyond the gross margin calculation, which only factors in the “cost of goods sold” – or how much the input materials and direct labor cost the company to produce saleable goods. Determining net profit includes factoring in the cost of goods sold figure, but also includes other expenses, including, but not limitedsuch as to payroll, lease payments, taxes, etcand others.

Once all cash flow, expenses and costs are factored in, whatever amount remains would be considered the net profit. The total revenue is self-explanatory as it’s simply 100 percent% of a business’ sales in a defined time-frame. From there, the net profit is divided by the company’s total revenue., and then From there it’s multiplied by 100 to get the percentage or net profit margin.      

Potential Explanations for Varied Net Profit Margins

Ideally, the higher the net profit margin is, the better the financial health of a company generally has. However, a low profit margin for a period of time or over the long term doesn’t necessarily mean a business is poorly managed. There are many reasons why a low net profit margin may exist and persist.

Different Margins Depending on Each Industry

As Forbes and Sageworks points out, the higher the net profit margin is, the better it is for the company. However, there are some considerations when it comes to what’s expected on average for different industries. For example, looking at the data ending June 30, 2017, for the previous 12 months, the “Medical and Diagnostic Laboratories” industry saw an average net profit margin of 12.1 percent. Conversely, the “Accounting, Tax Preparation, Bookkeeping, and Payroll Services” saw a net profit margin of 18.4 percent.

While these industries are on the high end, Forbes and Sageworks point out that other industries, such as the grocery industry, are still profitable, but do so by making their profits on lower margins, but with a much higher volume. 

Financing Considerations

Another factor that can lower a company’s profit margin is how its financing is structured. If a company chooses to incur debt financing to buy fixtures or pay employees to run operations, interest expenses,  – especially initially – , could negatively impact a company’s net profit margin.  

Infrequent or One-Time Exceptions to Operations

If a business has recently sold a profitable (or unprofitable) division) and that sale has made a material change in revenue, especially for a single quarter, it can provide an anomaly in a company’s net profit margin calculation. Similarly, if business fixtures don’t get purchased or often or equipment is reduced, for example, net profit margin can be impacted noticeably.

Regardless of the industry one works in, understanding what one’s a business’ net profit margin is, is another helpful tool in determining to account for how and why a business is making or losing money.






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Elderly Caregiver Facts and Figures

Elderly Caregiver Facts and Figures, Long Term CarThese days, people who live to age 65 can expect to live at least another 20 years. That means many are likely to require some form of assisted caregiving. According to aging experts, the following guidelines describe characteristics of those most likely to need long-term care:

  • Age – Risk increases as people get older
  • Gender – Women are at higher risk because they tend to live longer than men
  • Marital status – Single people are less likely to have family resources and will therefore need to pay for caregivers
  • Lifestyle – People who do not eat a healthy diet and exercise are more likely to have debilitating health conditions
  • Family history – People with compromised genetics are at higher risk

As for family caregivers, the typical profile has been shifting over the past few years. The following are some interesting new statistics from Genworth Financial, a leader in long-term care insurance.

  • Men now comprise nearly half of family caregivers
  • The average age of a family caregiver is 47 (age 53 in 2010)
  • Only 57 percent of family members who require care are 65 or older (80 percent in 2010)
  • 20 percent of long-term care recipients need help as the result of an accident rather than illness (10 percent in 2010)
  • Caregivers average 21 hours of assistance a week for a duration of three years

Long-Term Services and Support

Caregiving needs can vary dramatically depending on the recipient’s condition. For the convenience of categorization, the term “long-term services and supports” (LTSS) refers to assistance with daily tasks such as bathing, dressing, preparing meals and household chores. A recent study reported that the average cost for people with high LTSS needs is about $10,000 a year.

How to Pay for Elderly Caregiving

One of the biggest problems in retirement planning is how to pay for long-term caregiving. Today, only 7 percent of the $300 billion the United States spends on long-term support and services is paid for through private insurance. According to the USC Leonard Davis School of Gerontology, about half of the U.S. population will be paying out-of-pocket for LTSS expenses by 2025.

While fees vary based on location and other benefits, the following are national averages for various types of long-term care services.

Annual Cost

  • Adult Day Health Care: $18,720
  • Assisted Living Facility: $48,000
  • Homemaker Services: $48,048
  • Home Health Aide: $50,336
  • Semi-Private Room in a Nursing Home: $89,297
  • Private Room in a Nursing Home: $100,375

Health Insurance

Regular health insurance covers only acute care, such as rehabilitation after a hospital stay. It is not designed to cover the cost of caregiving over the long haul.


Medicare used to pay for nursing home care only after a hospital stay, limited to 100 days. However, starting in 2019, Medicare Advantage (MA) plans are allowed to offer coverage for certain long-term care services as deemed medically appropriate by a licensed health care provider. Each insurer has the ability to define coverage options. Be aware that this new rule pertains only to MA plans, not original Medicare.

Long-Term Care Insurance

Long-term care insurance (LTCI) is specifically designed to cover caregiving associated with serious impairment over a limited period of time, such as three years. Today, about 40 percent of employers offer some form of long-term care insurance. In most cases, the policy is offered on a voluntary basis in which employees pay the full premium.

  • Large employers (500+ employees) generally offer traditional long-term care insurance.
  • Small- and medium-sized companies typically offer “multi-life” LTCI packages, which bundle individual long-term care insurance policies for a worker’s spouse and parents, offered at a discount. Note that these policies tend to require stringent medical underwriting.

Retirement Community

Another option for tailored long-term caregiving is moving into a Continuing Care Retirement Community (CCRC). This type of community provides a progression of residence and care as a person’s health declines, ranging from an independent house or apartment, to assisted living, to memory care or skilled nursing for life. This type of community is typically rich in amenities, such as a community dining room, entertainment venue, fitness center and wellness programs, plus cultural arts and shopping excursions.

There are about 2,000 CCRCs nationwide, many with waitlists, and they are quite expensive relative to other senior living options. To initially qualify, you usually must be at least 62 and healthy enough to live independently. The entry fee ranges from less than $100,000 to more than $1 million, averaging about $320,000. Residents also pay a monthly fee, which averages $3,266 nationwide and tends to increase by 3 percent to 4 percent each year. Once residents die, their heirs can sell the property to another buyer who meets the entry criteria, and the CCRC may be entitled to part of any home-price appreciation.

Bear in mind that one of the primary reasons to make caregiving expenses a key part of retirement planning is to protect a household’s overall finances. In other words, you don’t want a couple’s entire nest egg used to pay for caregiving expenses of one disabled spouse – with nothing left over for the other spouse to live on.

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Blocking Emergency Funds, Protecting Land, Withdrawing Troops, Spying on Russia

H.J.Res. 46, S. 47, S. 483, S.J.Res. 7, H.R. 1404, H.R. 1617Relating to a national emergency declared by the President on Feb. 15 (H.J.Res. 46) – This resolution was an effort to block the national emergency declared by President Trump for the purpose of using funds previously allocated for other initiatives to build a border wall along the southern border shared with Mexico. The resolution, which was introduced on Feb. 22 by Rep. Joaquin Castro (D-TX), represents the first ever Congressional challenge to the 1976 National Emergencies Act. The initiative passed in both the House and the Senate but was then vetoed by the President on March 15.

John D. Dingell Jr. Conservation, Management and Recreation Act (S. 47) – This bill (renamed from Natural Resources Management Act) sets forth provisions for various programs, projects, activities and studies for the management and conservation of natural resources on federal lands. The expansive bipartisan legislation incorporates provisions from more than 70 other bills previously introduced in Congress by dozens of senators and representatives for conservation and land management projects in their jurisdictions. The bill was introduced on Jan. 8 by Sen. Lisa Murkowski (R-AK). It was passed by both the House and the Senate and signed into law on March 12.

Pesticide Registration Improvement Extension Act of 2018 (S. 483) – PRIA 4 reauthorizes and updates the fee collection provisions and authorities available under the Federal Insecticide, Fungicide and Rodenticide Act, as well as addresses worker protections. This newest version of PRIA provides the Environmental Protection Agency (EPA) with more resources to evaluate pesticide registrations and preserves two rules to protect workers and consumers who are exposed to pesticides in agricultural, residential and commercial settings: the Agricultural Worker Protection Standard (WPS) and the Certification of Pesticide Applicators (CPA) rule. This legislation was introduced on Feb. 13 by Sen. Pat Roberts (R-KS). It was passed unanimously in the House and the Senate and signed into law on March 8.

A joint resolution to direct the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress (S.J.Res. 7) – Throughout both the Obama and Trump administrations, the United States has supported a Saudi Arabia-led coalition to restore the pre-existing Yemeni government to power. The current civil war has been ongoing since March 2015. However, since the Saudi Crown Prince Mohammed bin Salman was believed to have authorized the murder of U.S.-based journalist Jamal Khashoggi last October, public sentiment has largely turned against the Saudi regime. This joint resolution is designed to prevent the United States from fighting in or assisting in Yemen’s civil war, starting 30 days after the legislation passes. The legislation was introduced into Congress on Jan. 30 by Sen. Bernie Sanders (I-VT). It passed in the Senate on March 13 and has been sent to the House for consideration.

Vladimir Putin Transparency Act (H.R. 1404) – This bill was introduced by Rep. Val Demings (D-FL) on Feb. 27. It passed in the House on March 12 and is now with the Senate for consideration. This bill would direct the Office of the Director of National Intelligence to report to Congress about Russian President Vladimir Putin on matters concerning his estimated net worth and known sources of income; intermediaries, including shell companies, that he uses; and the identities of senior Russian officials and oligarchs who facilitate his corrupt acts.

KREMLIN Act (H.R. 1617) – This bill was introduced on March 7 by Rep. Raja Krishnamoorthi (D-IL). The legislation would authorize the Director of National Intelligence to submit ongoing assessments of the intentions of the political leadership of the Russian Federation, and for other purposes. This bill passed in the House on March 12 and is now in the Senate.

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