Your Unbiased Advisor: Which type of broker/advisor is best for you?

Can I use my Roth IRA as my emergency fund?

Sure—you already paid tax on the money you contributed to a Roth IRA. However, there are a few rules to follow. When you withdrawal Roth IRA funds for an emergency or any expense, take the “contributions” first. Your custodian usually has a record of what you put in versus what that money has earned. Contributions can’t be taxed again and there is no penalty even if you are under 59.5 years old. If you are older, there is no tax either. Make sure you tell the custodian that you plan to put the money back in 60 days so they code the withdrawal properly. You are allowed only one rollover per year. Logically, you want to keep your Roth IRA emergency money in a money-market fund. However, many folks begin making contributions to a balanced (stocks and bonds) fund so they can build up the amount over time. Periodically move money to a Roth IRA MMF. When you need funds, make sure the money can be transferred to your bank account quickly. Do NOT let them take taxes out—you paid taxes on this money already. Don’t let them cut a check that you won't get for weeks—they like to hold the cash in their account as long as possible. You can even use this fund to pay no taxes later in retirement.

Build your tax-FREE account: https://www.amazon.com/Your-ZERO-Tax-Account-Wealthy/dp/1482772795

Which type of broker/advisor is best for you?

If we could know the future, this would be an easy decision. Bernie Madoff just died but his fraud is a lesson. Madoff pleaded guilty to 11 crimes: defrauded as many as 37,000 people in 136 countries over four decades. Mr Madoff was chairman of one of Wall Street’s regulators at one time. His investors gave him tons of money to invest because he promised to do his best and his creds were above many other advisors. Each week I document the many scammers in my old industry. There is no guarantee for investors. As a broker dealer manager, I saw how good well-meaning sales people can veer into trouble. Why? There are few safeguards in money-handling sales. The product is invisible. One is the designation called CFP. CERTIFIED FINANCIAL PLANNER™ Like a lawyer, they work for fees not commissions. The other way to help you avoid a Madoff type scam is to use a fee-only securities provider. Vanguard Group offers products via a unique corporate structure: We investors actually own the funds we invest in. There is no middle person/firm to take profits. Vanguard has salaried non-commission licensed “crew members” to help us. And Warren Buffett, one of the greatest investors, recommends Vanguard Funds. Use a less biased advisor without an incentive to steal.

Make Buffett be your advisor: https://www.amazon.com/Warren-Buffetts-Vanguard-Funds-Retirement/dp/1496148592

We don’t have to pay off the $1 Trillion in taxes that the wealthy owe

The actual annual tax gap possibly exceeds $1 trillion per year, IRS Commissioner Charles Rettig told senators Tuesday. You and I know why the Congress does not do anything about it. Congress receives funds from the wealthy that let them hide their money from the rules that we must follow. We can’t afford to hire lawyers and accountants to set up offshore and intricate legal entities to obscure income. Remember how President Trump boasted that he doesn’t pay taxes because he is ‘smart’. Actually his staff is paid to hide his income. Since we only have one year available to see how he does it, we know one method—use the paper losses of a business to write off personal income. In the 1995 return he claims a loss of almost $1 billion: we taxpayers owed him a refund for many future years of his personal income. For the wealthy, even the ones that don’t hide income, the rules allow them to pay about HALF the rate we pay. Warren Buffett explains that he pays only 17.7%; HALF the 33% his staff pays. We have two ways to avoid paying for the national debt that the rich have run up. ONE: we start by using a business to cover some expenses and let the loss offset our income. TWO: we produce income inside a tax-FREE account. We produce tax-FREE income legally.

Start today: https://www.amazon.com/Tax-Free-Living-2012-strategies-build/dp/1477452702/

Is there a correct number of stocks to own?

Sure! Just one if you were Apple’s Steve Jobs or Microsoft’s Bill Gates or Amazon’s Jeff Bezos.

But most of us including Warren Buffett can’t know which stock will be the top grossing stocks of all time. So here is the answer as explained by Mr Buffett and his partner Mr Munger:

We like to put a lot of money in things that we feel strongly about. And that gets back to the diversification question. You know, we think diversification is - as practiced generally - makes very little sense for anyone that knows what they're doing. Diversification is a protection against ignorance. For most of us who know we do not know how to analyze businesses, we buy everything—an index of the top 500 stocks. If you know how to analyze businesses and value businesses, it's crazy to own 50 stocks or 40 stocks or 30 stocks, probably, because there aren't that many wonderful businesses that are understandable to a single human being, in all likelihood.

Charlie Munger said: The first rule of compounding: Never interrupt it unnecessarily.

If an initially very concentrated portfolio is likely to turn into an unbearably concentrated portfolio after a few years, then it's not really built with the long term in mind. So if you are clear on what you DO NOT KNOW, compound the index for 11%.

Buffett strategy: https://www.amazon.com/MasterClass-Buffetts-SIMPLE-Strategy/dp/1983485268

Which market sector will provide the best returns in the future?

Since we can’t know what is ahead and we can’t assume the future is determined by the past, which sector are you betting on? ETFs have become the broker/advisor security of choice so that they can trade every day. However, most serious investors know that fast trading prevents you from enjoying multiple-year compounding and dividends. So which one do you favor for the future? Energy is the current leader but can it return 30% in the next few years. Or will it fall out of favor like consumer staples? Unless you know your business sector well or have Mr Buffett’s talent for analyzing large companies, you may be better off skipping your broker/advisor’s recommendations and just holding a low-cost index of large or small, growth or value stocks. Actually the most popular choice is the large company stock index. John Bogle, founder of Vanguard Group, created the simple 500 index fund because his research showed it was better for us to avoid trading by expensive stock pickers. Investing does not have to be complicated.

Simple wins: https://www.amazon.com/Buffett-Bogle-Holy-Bible-Investment/dp/1523693045

How to “guarantee” a tax-FREE retirement income

Put your investing on automatic. Use Buffett's Investment Strategy: Set it and Forget it "… our favorite holding period is FOREVER.” Manage the account only once a year! Contribute $9 a day, $250 a month. Accumulate $55,000, $200,000, $1,000,000 over time. Use a special IRS account for Tax-FREE income. Use only low-cost high-return mutual funds. Warren Buffett's Investing Strategy is buy and hold FOREVER high earning companies. This allows compounding to work. Compounding is money earning money on its earnings when it is invested. Invest your money in businesses sharing profits with you and over time you can reach $1,000,000. A special account makes it tax-FREE. Tax-FREE is like a $300,000 bonus. When we invest in successful businesses, we can earn 10% to 12% a year. After 10 years, we can have $55,000 because the businesses paid dividends and we reinvested them. After 20 years, we could have $200,000 and after 33 years, perhaps $1,000,000. Over time, stocks are safer than bank CDs because we earn more than inflation subtracts. We have more buying power. Compounding works best when we put our money to work in successful businesses paying us dividends and stock splits. When we use a low-cost AND tax-FREE account, we avoid fees and taxes so we keep more of our money to compound. See how fast our investment can grow if we invest it in businesses like the ones we use every day.

https://www.amazon.com/Warren-Buffetts-Investment-Strategy-Forget/dp/1484822900

Where is that refund?

The Internal Revenue Service today reminds taxpayers that the most convenient way to check on a tax refund is by using the “Where’s My Refund?” tool at IRS.gov or through the IRS2Go Mobile App.

Where is the stimulus 1 or 2? If you did not receive stimulus 1 or 2, start filing here: https://www.irs.gov/newsroom/recovery-rebate-credit.

Estimated tax payments are still due April 15. If you are self-employed or do not have enough withheld from a paycheck, pension or Social Security, you may have to send quarterly payments to the IRS. Tax returns for 2020 are due May 17 not April 15 but the estimated tax payments are still on schedule.

IRS will redo your taxes and send refund if you paid tax on Unemployment 2020 or you paid ObamaCare’s excess advance premium tax credit repayment.

Have tax forms; will file … for FREE but WAIT . . .

If you have unemployment income, ObamaCare coverage you should wait to file since the IRS has not yet implemented tax-FREE provisions of the new Covid law. If you already filed and paid tax on your unemployment income, IRS says it will send you a refund of the tax automatically. DO NOT FILE an amended return to obtain a refund on this tax. Taxes due MAY 17 not April 15. Input the W-2, unemployment, SS benefits, IRAs, pensions, RMD, brokerage, etc. forms you have. You can file for FREE online. If you didn’t receive a correct form, file a Form 4852. Usually filing your state return costs as little as $15 unless you buy the Pro helpline. Avoid $300-400 paid preparer fees—new IRS forms mean higher fees. Unemployment insurance is TAXABLE on the Federal income tax return; not on some state returns. Some states do not tax your SS and pension benefits.

Retirees did not have to take their RMDs in 2020 so taxes may be less: it was a good time to convert IRA to Roth IRA for tax-FREE future. Unless you were self-employed, you can’t deduct home office expenses of working from home. You can deduct as medical expense all Covid prevention supplies. Some states continue the health insurance mandate and penalty unless you have an exemption. Since the IRA contribution deduction has no age limit now, you may reduce your income/taxes by making a contribution of up to $7,000. The standard deduction went up to $12,400 single; $24,800 joint. Jan 15 last day to make 2020 estimated payments. You have to report your April/May and December/January stimulus payments even though they are not taxable. Some of us receive a bank credit; some a debit card; some a check. Even if you don’t have to file, you should file so scammers can’t use your SS number to mess up your IRS file. Tested E file software ratings. Efile Jan 15; IRS processing Feb 12.

E file avoids covid at your preparers’ office: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free

What to do if you can’t pay by May 17?

Avoid the penalty for not paying estimated tax. Ask for an automatic extension to file till October. If that does not work for you, you can apply for a payment plan. An individual can setup an IRS installment plan if you owe $50,000 or less and can pay back the amount owed in 3 years. If you are a business owner, you can setup an installment plan if you owe $25,000 or less. The IRS will charge a one-time fee of $105.

If you own less than $25,000 and can pay the amount owed within six years, ask the IRS for a streamlined payment agreement. The IRS will charge a one-time fee of $102.

Request an Offer in Compromise if you cannot pay the total amount owed. This allows you to settle your tax debt for less than the total amount owed if you will be unable to pay back the total amount owed within 10 years. The IRS will charge a one-time fee of $150. Given the pandemic economic hardship, apply for the extension to file now: https://www.irs.gov/pub/irs-pdf/f4868.pdf

Special circumstances help: call the IRS Taxpayer Advocate Service 1-877-777-4778 for free assistance.

More ways: https://www.irs.gov/newsroom/heres-how-people-can-pay-their-federal-taxes

IRS has $1.3 billion refunds for 2017 tax returns

Unclaimed income tax refunds worth more than $1.3 billion await an estimated 1.3 million taxpayers who did not file a 2017 return, according to the IRS. “Time is quickly running out for these taxpayers. There’s only a three-year window to claim these refunds, and the window closes on May 17.” If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury. Filing instructions are available on the IRS.gov Forms and Publications page or 800-829-3676.

You have 45 days to collect your cash!

**********ACCOUNTABILITY**************

Like 1776, this period is a test of democracy—We rejected an "American fascist"

Swing state GOP laws limit Dem voting: “only way to win”

Will the ‘militia’ (terrorists) try another coup?

1/6/21 Coup: “quick reaction force” with weapons ready

Trump delayed helping: Capitol Police died

Where ‘Truth and Reconciliation Commission’?

How Govt wastes our money:

MS, AR, TN, AL, GA have unused vaccine slots: GOP deny Covid danger

40% Marines afraid of vaccine shot: Pentagon costs of health care to rise so we pay more

FedEx made $1.2 BILLION in profits last year but paid NOTHING in federal taxes