Online Advisor
Timothy W. Tuttle & Associates
 


Volume 18 Edition 11   †††††† Please email comments to newsletter@tuttlefirm.com                  Nov 2021


Major Events This Month:

Upcoming dates:

November 11

- Veterans Day

November 25

- Thanksgiving

November 26

- Black Friday

Reminder

- Conduct year-end tax and financial planning

Time is running out to minimize your tax obligation before the end of the year! This monthís newsletter features several tax moves to consider making by December 31st to lessen the amount of money you owe the IRS.

Review the Social Security benefits and their recent changes, plus learn about the greatest, unreported theft in America - and you are a victim! All this and ideas for your business are outlined in this month's newsletter.

Please call if you would like to discuss how this information could impact your situation. If you know someone who could benefit from this newsletter, feel free to send it to them.

Tax Moves to Make Before Year-End

There are always moves you can make to reduce your taxable income. Some of these tax-saving moves, however, must be completed by December 31. Here are several to consider:

 

Social Security Announces 2022 Adjustments

YOUR 2022 SOCIAL SECURITY benefits have changed

AVERAGE RETIREMENT BENEFITS
Starting January 2022

DID YOU KNOW ...

2022 SOCIAL SECURITY AND MEDICARE TAX RATES

If you work for someone else...

If you're self-employed...

NOTE: The above tax rates are a combination of 6.2% Social Security and 1.45% for Medicare. There is also 0.9% Medicare wages surtax for those with wages above $200,000 single ($250,000 joint filers) that is not reflected in these figures.

Item

2022

2021

Change

Maximum amount you may pay in Social Security taxes

$9,114.00

$8,853.60

+ $260.40

Maximum earnings amount Social Security will tax at 6.2%

$147,000

$142,800

+ $4,200

SOCIAL SECURITY PAYMENTS EXPLAINED

MAXIMUM SSI PAYMENTS

Filing Status

2022

2021

Change

Individual

$841/mo

$794/mo

+ $47

Couple

$1,261/mo

$1,191/mo

+ $70

HOW DOES SOCIAL SECURITY WORK?

HEREíS HOW YOU QUALIFY FOR RETIREMENT BENEFITS

When you work and pay Social Security taxes, you earn credits toward benefits. The number of credits you need to earn retirement benefits depends on when you were born.

DID YOU KNOW YOU CAN CHECK YOUR BENEFITS STATUS BEFORE YOU RETIRE?

Sources: SSA.gov

 

The Greatest Theft in America

And you are a victim!

For generations weíve been taught by our parents to save. Save for a bicycle. Save for college. Save for retirement. And then, in retirement, you could count on this savings to earn interest. Millions of Americans used Certificates of Deposits (CDs) and low risk bonds to ensure they could retire without worry. Think about this...$50,000 in CDs in 1990 earned 8% interest, or $4,164, each year. And a $10,000 balance in your savings account earned 5.5% interest, or $565, each year.

The theft

Today that $50,000 earns 0.6% interest, or $301. The other $3,863 is no longer yours! And your bank now only needs $50 to pay you for the use of the $10,000 in your savings account. Where did that money go? Who took it and why arenít you upset about it?

Your interest income now benefits someone else

The simple truth is your savings interest is being given to those borrowing money in the form of lower interest rates on their loans. You lose your interest income and pave the way so someone can buy a home for lower interest, a business can buy equipment at lower financing rates or so the government can pay low interest rates on their spending in excess of their tax revenue.

In fact, the governmentís spending is the elephant in the room. The government cannot afford to pay high interest on their excess spending, so there is tremendous pressure to keep interest rates on these borrowings as low as possible. This policy reverberates through the banks who price their lending on low fed rates.

The message being given

The inadvertent message to savers? Stop saving! Yes, we are taking your money and lending it to someone else. But since our loan rates are so low, we cannot pay you much of anything for the use of your money. So stop saving and go into debt. The interest is so low!

The conclusion

Yes, you are a victim of interest income theft. It is being given to borrowers, especially the government. Here are some ideas to reduce the cost of being a victim of this theft:

Source: Bankrate historic rates for CDís and deposit account in 1990 and in August 2021, as well as The Buffalo News, April 11, 1990.

Year-End Tax Planning Ideas for Your Business

Here are some ideas to lower your business taxes, get organized, and to prepare for filing your 2021 tax return.

As 2021 winds down, here are some ideas to consider in order to help manage your small business and prepare for filing your upcoming tax return.

 

Fake Products (and Money!) Are Big Business

How to protect yourself from modern-day counterfeiters

Counterfeiters are getting better at tricking you. They do this by using fake images, creating realistic websites and promising low prices. According to the Organization for Economic Co-operation and Development (OECD), fraudsters hold an estimated 3.3% of world trade, up from 2.5% in 2016. Here are some commonly counterfeited items and what you need to know to protect yourself.

Commonly Counterfeited Items

How to Protect Yourself

 

The Power of Comparative Financial Statements

Your business has a story to tell. And one of the ways to hear your businessís story is by reading through comparative financial statements.

The importance of comparative financial statements

An up-to-date balance sheet, income statement and statement of cash flows are essential financial reports you should consistently analyze. But these financial statements by themselves donít tell the whole story about your business. Consider the following:

And hereís the rest of the story:

These examples show the importance of analyzing your financial statements in comparison with something else. Reading through the first list of bullet points only tells part of the story.

What you can do

Here are several types of comparative financial statements you can create for your business and some tips for getting the most out of these reports.

 

As always, should you have any questions or concerns regarding your tax situation please feel free to call.


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The information contained in this newsletter is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. For more information on anything in ONLINE ADVISOR, or for assistance with any of your tax, business, or financial strategy concerns, contact our office.

Timothy W. Tuttle & Associates
www.tuttlefirm.com