DiSabatino CPA Blog

A blog by Michael DiSabatino CPA with topics on Tax Savings, Business, Management and more...
A monthly newsletter produced by the firm of DiSabatino, CPA providing tax saving, business and financial strategies geared towards helping our clients.

April 2018 DiSabatino, CPA Newsletter

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April 2018

In this issue:

  • Tax Quiz: So You Think Our Taxes Are Crazy?
  • Know the Top IRS Tax Scams
  • When an Extension May Make Sense
  • Win the Battle Against Retirement Health Care Costs

This Month:

  • April 17th: 2017 Individual federal tax returns due
  • April 17th: First-quarter 2018 estimated tax due
  • April 1st: Easter Sunday
  • Other April 17 Deadlines:
    - Six Month Filing Extension
    - 2017 Gift Taxes
    - 2017 IRA Contributions

Happy tax filing month! To help celebrate, this month's newsletter includes a quiz on strange tax laws from around the world. Also included are some tips for using your refund check as well as advice on handling spiraling health care costs during retirement. Should you wish to review your situation please feel free to call. Also feel free to forward this newsletter to someone who may benefit.

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March 2018 DiSabatino, CPA Newsletter

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March 2018

In this issue:

  • Answers to Commonly Asked Tax Questions
  • Alert: Expired Tax Breaks Revived for 2017
  • Your Brain on Social Media: How to make online interaction better for your health
  • Staying Organized Before and After Tax Time

This Month:

  • March 15th: Due date for partnership and S corporation tax returns (Forms 1065,1120S)
  • Reminders: Daylight-saving time begins Sunday, March 11

Tax season is underway, and articles in this month's issue will help get you over the finish line. Included are some answers to commonly asked tax questions, an update on some late tax breaks now available for 2017, and some tips on how to stay organized when you file your return this year. Also included is an article about how to make social media use healthier for you and your family.

Should you wish to review your situation, please feel free to call. Also feel free to forward this newsletter to someone who may benefit from this information.

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February 2018 DiSabatino, CPA Newsletter

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February 2018

In this Issue:

  • New Tax Legislation Requires Planning
  • Your New Life as a Pass-Through Entity Owner: An initial look at the new business deduction
  • Taxes and Virtual Currencies: What you need to know
  • How to Navigate the World of Crowdfunding

This Month:

  • Feb. 14th: Valentine's Day
  • Feb. 15th: Employer deadline to adopt new withholding schedule
  • Feb. 19th: Presidents' Day
  • Reminders: • Receive all 1099s and W-2s • Set up tax appointment • Rebalance Investment Portfolios

As your mailbox fills up with the forms you need to file your 2017 returns, you may already be thinking ahead to how tax reform legislation will impact you in 2018. This newsletter outlines seven issues resulting from the Tax Cuts and Jobs Act to think about after the 2017 tax season. The new tax rules affecting small businesses are also explored in detail here, as well as some guidelines for virtual currencies like Bitcoin. Also included: a primer on the current world of crowdfunding, both for entertainment and for entrepreneurs who want to try it themselves.

Should you wish to review your situation please feel free to call. Also feel free to forward this newsletter to someone who may benefit from this information.

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January 2018 DiSabatino, CPA Newsletter

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January 2018
In this issue:

  • Tax Reform in 2018: Individual rule changes
  • Best Way to Avoid an Audit: Preparation
  • Where Did My Retirement Go?: How to locate lost benefits
  • New Year's Resolutions Are for Suckers: Do this instead
  • Mileage Rates for 2018

This Month:

  • Jan. 1st: New Year's Day
  • Jan. 15th: Martin Luther King Jr. Day
  • Jan. 16th: 4th Quarter Estimated Payments Due
  • Start tax planning for the new year:
    • Adjust withholdings
    • Organize filing records
    • Schedule tax reform consultation
    • Rebalance investment portfolio

Happy New Year! Now that tax reform has passed, there are many changes to consider. Some of the major ones are summarized in this newsletter. And as you prepare to file your 2017 return, take note of the advice on avoiding audits. Also included are some tips on locating lost retirement benefits, and some unconventional thinking about New Year's resolutions.

Should you wish to review your situation please feel free to call. Also feel free to forward this newsletter to someone who may benefit from this information. Have a happy and productive 2018!

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December 2017 DiSabatino, CPA Newsletter

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December 2017

In this Issue:

  • New Year, New Job: Five Tax Tips for Job Changers
  • Save more in 2018: Retirement contribution and Social Security limits on the rise
  • A Happy Holiday Traditions Quiz
  • Credit Card Transactions Could Pose Audit Risk: What small businesses need to know

This Month:

  • December 12th: Hanukkah Begins
  • December 25th: Christmas Day
  • December 26th: Kwanzaa Begins
  • January 16th: 4th Quarter Estimated Payments Due
  • Take final year-end actions:
    • Deductible gifts
    • Capital gains/losses
    • Charitable giving
    • Dividend income

After an eventful year, we all deserve a happy holiday season and hopefully some well-needed relaxation. While tax reform will continue to be debated, many preliminary figures for 2018 are set. Check out the details inside. The economy and job market have continued to improve, which means you may be considering new work. If you are planning on a change, look at the tax checklist for job changers. Or, if you work for yourself and take credit cards as payment, learn about the new IRS focus on those small business payments.

Looking for something to talk about at the next family gathering? Consider sharing the quiz regarding the sometimes strange origins of popular holiday traditions.

As always, should you know of someone who may benefit from this information please feel free to forward this newsletter to them.

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November 2017 DiSabatino, CPA Newsletter

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November 2017

In this Issue:

  • Year-End Tax Checklist
  • Six Must-Dos When You Donate to Charity 
  • The Equifax Breach and You: Be Proactive
  • Five Great Banking Tips
  • Holiday Shopping Survival Guide 

This Month:

  • Saturday, Nov. 11th: Veterans Day
  • Thursday, Nov. 23rd: Thanksgiving
  • Friday, Nov. 24th: Black Friday (shopping sale day)
  • Monday, Nov. 27th: Cyber Monday (online shopping sale day)
  • Tuesday, Nov. 28th: #GivingTuesday (charitable giving day)
  • Reminder: Conduct year-end tax and financial planning

Now is a good time to review your year-end tax situation while there is still time to act. This newsletter begins with a handy checklist to help you do that. There are details on "must-dos" to get the most out of your charitable donations.

Also inside: personal finance articles on how to protect your credit in the wake of the Equifax security breach earlier this year, as well as how to get the best experience from your bank. Finally, check out the survival guide for the upcoming Black Friday and Cyber Monday shopping days.

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October 2017 DiSabatino, CPA Newsletter


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October 2017

In this Issue:

  • Ace the FAFSA
  • Review Your ITIN Now
  • Dos and Don'ts of Business Expensing
  • Fix Youre Overfunded Account

This month:

  • October 1st: SIMPLE IRA plan establishment due
  • October 15th: Extended tax return filing deadline
  • October 31st: Halloween

Tax reform is under discussion in Congress as we enter the fall months, and students are back in school. While we wait to see what comes out of Washington DC, here are some suggestions for students and parents to get an A+ on their next FAFSA student loan application.

Also included are articles on the requirement to renew your taxpayer identification number, as well as a checklist of "dos" and "don'ts" for anyone taking business expenses for things like travel, meals and entertainment. Since the end of the year is typically when we run into overfunding problems with retirement accounts, there's also an article with tips to fix any issues while there's still time.

As always, should you know of someone who may benefit from this information please feel free to forward this newsletter to them.

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September 2017 DiSabatino, CPA Newsletter


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September 2017
  • September 4th:
  • Labor Day
  • September 15th:
  • 3rd Quarter Estimated Tax Due
  • October 1st:
  • SIMPLE IRA plan establishment due
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August 2017 DiSabatino, CPA Newsletter

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August 2017

In this Issue:

This Month:

  • September 4th:Labor Day

 Hope you're having a great summer. This month's newsletter overviews the different kinds of state and local taxes that may impact your choice of where to live during retirement. It also looks at the pros and cons of using a Health Savings Account as a tax-advantaged savings tool. There are some tips for conducting an insurance self-review, and advice on becoming a smart renter.

As always, feel free to forward this newsletter to anyone who may benefit.

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July 2017 DiSabatino, CPA Newsletter

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July 2017
In this issue:

  • Zombie Billing: Automatic Payments Have a Life of Their Own
  • Five Home Office Deduction Mistakes
  • Simplified Home Office Deduction
  • How Much Do You Need to Retire?
  • Common Mistakes When Buying or Selling a Business

This month:

  • July 4th:Independence Day

Happy Fourth of July! While you're doing your best to avoid the summer heat, take a look at these tips for your tax and personal financial planning. This issue includes articles on retirement planning and on keeping your automatic bill payments under control. For the business-minded, there is a list of things to avoid when buying or selling a business, and five common mistakes made by those using the home office deduction.  As always, feel free to forward this newsletter to anyone who may benefit.

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June 2017 DiSabatino, CPA Newsletter

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June 2017
  • Donate Stock to Lower Your Tax Burden
  • Keep Your Audit Fears in Check
  • Home Buying in a Seller's Market
  • Five Reasons to Incorporate Your Business

 This month:

  • June 15th: 2nd Quarter Estimated Tax Due
  • June 18th: Father's Day
  • July 4th: Independence Day

There's an old Wall Street saying, "Sell in May and go away," advising investors to avoid the historically volatile summer markets. If you are considering selling stock this summer, you may consider donating instead as a way to lower your tax burden. Details on tax-efficient donating are inside, as well some comforting information about the declining frequency of IRS audits. Summer also tends to ignite our home buying instincts, so check out the article with tips for buying a home in this seller's market. Finally, if you're a business owner consider the list of reasons to incorporate.

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May 2017 DiSabatino, CPA Newsletter


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Spring is in the air and before you know it summer will be upon us. It's the time of year when couples tie the knot; some of the tax to-dos for the newly married are enclosed. Unfortunately it's also audit season. One common audit trigger is incorrectly reporting business versus hobby activity; included here are some dos and don'ts. Also included are a list of tips for working into retirement age, as well as an article on the most effective ways to protect yourself from identity theft.

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April 2017 DiSabatino, CPA Newsletter


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Happy tax filing month! To help celebrate, this month's newsletter includes a tax quiz exploring the history of taxation in the United States. Also included is a reminder to help your favorite charitable organizations retain their nonprofit status, a simple four-step household budget building process and a reminder of some popular tax breaks that are no longer available in 2017.

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March 2017 DiSabatino, CPA Newsletter

March 2017 DiSabatino, CPA Newsletter

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March 2017
  • IRS Announces Annual Tax Scams
  • Inherited Property: A Matter of Value
  • Avoid this potential tax headache
  • The Right Ingredients to Improve Your Credit Score
  • Seven Common Retirement Account Mistakes

 This month:

  • March 12th:
  • Daylight Savings Time Begins
  • March 15th:
  • Due Date for 1120, 1120S Corp. Tax Returns
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February 2017 DiSabatino, CPA Newsletter

February 2017 DiSabatino, CPA Newsletter
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February 2017

As your mailbox fills up with information required to organize your 2016 tax records, now is the time to think about productive ways to use your potential refund. Outlined here are some ideas to consider. Unfortunately, tax-filing season is also tax-scam season. This month's newsletter shows you how to identify possible fraudsters that may target you. Information regarding the pending overtime law change and the taxability of collectibles round out this month's newsletter.

Should you know of someone who may benefit from this information please feel free to forward this to them.

Reminder: It is Tax Scam Season Too

Imagine you receive a call from an IRS agent who says you owe back taxes and threatens to arrest you if you don't immediately make a payment over the phone.

Thousands of Americans faced this situation in 2016, though the people on the other end of their phone lines weren't actually from the IRS. They were scam artists calling across the world from Mumbai, India. Their aggressive intimidation of U.S. taxpayers brought in $150,000 a day until police cracked down on their call center.

Amazingly, con artists impersonating IRS agents were involved in a quarter of all the consumer fraud incidents reported to the Better Business Bureau last year, making it by far the most common financial scam. With the new tax-filing season underway, now is the time to be especially vigilant.

hidden person

The threatening approach used in Mumbai is just one variety of IRS scam. Another involved sending emails from fake IRS addresses telling taxpayers that due to a mistake they were owed larger refunds. According to the email, all they had to do was provide their bank information and prepay the tax due on the larger refund. Once they made the prepayment, both the scammer and their supposed refund disappeared.

See through any IRS scam

By following a few guidelines you can see through any IRS scam:

Bullet Point Digital communication is a big no. The IRS will never initiate contact with you via email, text message or social media, nor will they request personal or financial information over those channels. If you do get an email communication purporting to be from the IRS don't click on any links or open any attachments. Instead, forward the email to This email address is being protected from spambots. You need JavaScript enabled to view it..
Bullet Point Mail first. The first contact from the real IRS will be through the mail. If you get a letter from the IRS that is unexpected or suspicious, it should have a form or notice number searchable on the IRS website, Compare what you find there with what you received. If it doesn't look right, you can call the IRS help desk at 1-800-829-1040 to question it.
Top scams of 2016 graphic
Bullet Point Never pay by phone. A legitimate IRS agent will never make a call to demand immediate payment of a bill or ask you to provide your debit or credit card information over the phone. If you are suspicious, ask for the employee's name, badge number and phone number. A real IRS agent won't hesitate to provide this information. You can then politely end the call and dial the IRS at 1-800-366-4484 to confirm the person's identity.

Overtime Rules Go Into Overtime

The fate of a Labor Department rule extending mandatory overtime pay to workers by doubling the eligible salary cap is uncertain under the new presidential administration.

The rule introduced by the Labor Department under the direction of former President Barack Obama increases the salary cap for workers eligible to receive mandatory overtime to $47,476. It extends mandatory overtime, or time-and-a-half pay, to workers primarily in managerial or administrative roles in the retail, restaurant, and nonprofit industries.

Time Clock

Opponents of the rule won a court injunction blocking it in November 2016. The case may be abandoned altogether depending on the priorities set by President Donald Trump's appointee to lead the Labor Department. Andrew Puzder, chief executive of fast food corporation CKE Restaurants Holdings Inc. (owner of Hardee's and Carl's Jr.) is undergoing Senate confirmation for the role. Until the case is resolved, the previous salary cap of $23,660 remains in place.


Use Your Tax Refund Wisely

Three of every four Americans got a refund check last year and the average amount was $2,777, according to IRS statistics. Because the amount of a refund is often uncertain, we may be tempted to spend it without too much planning. One way to counteract this natural tendency is to come up with a plan beforehand to spend your refund purposefully. Here are some ideas:

1 Pay off debt. If you have debt other than your home mortgage, a great spending priority can be to reduce or eliminate it. The longer you hold debt, the more the cumulative interest burden weighs on your future plans. You have to work harder for longer just to counteract the effect of the debt on your financial health. Start by paying down debts with the highest interest rates and work your way down the list until you bring your debt burden down to a manageable level.
Roth Basics
2 Save for retirement. Saving for retirement works like debt, but in reverse. The longer you set aside money for retirement, the more time you give the power of compound earnings to work for you. This money can even continue working for you long after you retire. Consider depositing some or all of your refund check into a Traditional or Roth IRA. You can contribute a total of $5,500 to an IRA every year, or $6,500 if you're 50 years old or older.
3 Save for a home. Home ownership is a source of wealth and stability for many Americans. If you don't own a home yet, consider building up a down payment fund using some of your refund. If you already own a home, consider using your refund to start paying your mortgage off early.
4 Invest in yourself. Sometimes the best investment isn't financial, but personal. If there's a course of study or conference that would improve your skills or knowledge, that could be a wise use of your money in the long run.
5 Give some of it away. Helping people, and being able to deduct gifts and charity from your next tax return, isn't the only benefit of giving to a good cause. Research shows that it makes us feel good on a neurological level. In fact, donating money activates our brains' pleasure centers more than receiving the equivalent amount.1

If a refund is in your future, start planning now on how it can best help your financial situation.



Collectibles and the Tax Collector

It typically takes a great deal of personal interest and expertise in a given field — whether it's rare art, coins or baseball cards — to judge a treasure from a trinket. For those of you who have been bitten by the collector's bug, here are some tax considerations.

Collectibles defined

According to the IRS: "Collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic beverages, and certain other tangible properties." 1What makes something a collectible is that it carries additional value based on its rarity and its market demand. Essentially, the opinion of other collectors and experts, based on what they are willing to pay for your collection, determines its value.

Collectible Coins

For example, a typical one-ounce gold coin is worth about $1,200 based upon the value of the metal and would not be considered a collectible by the IRS. However, a rare antique double eagle gold coin produced in the 19th century could be worth $20,000 to a collector, even though it is made of exactly the same amount of gold as the non-rare coin.

Collectibles special tax rate

When collectibles are sold, they become taxable at a maximum tax rate of 28 percent. The tax applies to profit on the sale of your collectibles.

That tax rate is considerably higher than the average capital gains tax of 15 percent that most people pay for non-collectible investments such as stocks and bonds (the tax range for long-term capital gains is from 0 to 20 percent). The exception to this rule is that if you've held your collection less than a year before you sell it, your capital gain will be taxed as regular income.

It's all about the basis

In order to calculate what you owe to the IRS if you sell your collectibles, start with your basis. Your basis typically equals the amount you paid for your collectibles, plus any auction or broker fees incurred during your purchase. If you spent money to refurbish, restore or maintain collectibles while you owned them, you can also add that to your basis.

Then, subtract your basis from the sale price of your collectibles; the amount left over is what is taxed. Here's an example:

Ima Dahl decides to sell an 1898 German Bisque porcelain doll from her collection. She's owned the doll for ten years and originally paid $700 for it. She also paid $150 two years ago to repair its cracked finish. She receives $1,800 by selling it at an online auction and spends $100 paying her auction fees and shipping to the new owner. Since she owned the doll for more than one year, her long-term capital gain is $850 and her potential maximum tax is $238. The calculation: $1,800 net sales price, minus the $700 basis, minus $150 for repairs, minus $100 selling expense multiplied by 28%.

Some collectible hints

Bullet Point Know the market value. If you inherit a collectible you will need to know the value of the object on the date you obtain it. This will usually become your basis when you sell it.
Bullet Point Investment or personal use. If your collectible is an investment you can usually take a loss on the sale of the collectible. Unfortunately, if the IRS deems the collectible has an element of personal use, you may not deduct the loss. An example of personal use may be the hanging of a painting on your wall. Being careful how you sell your collectible can also make a difference in managing your potential tax liability.
Bullet Point Collectibles tax rate good or bad. The 28 percent capital gain tax on collectibles is the maximum tax rate. For example, if you are in the 15 percent income tax range, your collectible gain is taxed at that rate. If your income tax bracket is higher than 28 percent, the collectibles tax rate is capped at 28 percent, resulting in a potentially lower tax rate versus ordinary income taxes.

As you can imagine, the taxes on buying and selling collectibles can be complex. If you are considering selling a potentially valuable item, ask for assistance.

1 Source: IRS 2016 Schedule D instructions

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

This newsletter is provided by

DiSabatino CPA 
Michael DiSabatino

651 Via Alondra, Suite 715
Camarillo, CA 93012

Phone: 805-389-7300
Fax:  805-435-7498

This email address is being protected from spambots. You need JavaScript enabled to view it.


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June 2015 DiSabatino CPA Newsletter

June 2015 DiSabatino CPA Newsletter

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In this issue:

  • The Chances of Being Audited
    2014 audit statistics show changes  
  • Know Someone Getting Married?
    Tips for every bride and groom  
  • The Father's Day Quiz
    A little summer fun  
  • In the News: IRS Data Breach
    Was your taxpayer identity stolen?  


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May 2015 DiSabatino CPA Newsletter

May 2015 DiSabatino CPA Newsletter

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In this issue:

  • A First Job
    Your Introduction to Taxes  
  • Five Interesting Consumer Inventions  
  • Change a Little... Save a Lot  
  • Financing for College? Be Creative.  

This month:

  •  May 10th:
    Mother's Day
  • Check May 25th:
    Memorial Day

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April 2015 DiSabatino CPA Newsletter

April 2015 DiSabatino CPA Newsletter

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In this issue:

  • 1913 Form 1040 Quiz
    How well do you know tax history?  
  • Is an Extension a Good Idea?  
  • Is There a Better Use for Your Bank Funds?  

This month:

  • April 15th:
    Tax Returns Due
  • Check April 15th:
    1st Quarter 2015 estimated tax payments due

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March 2015 DiSabatino CPA Newsletter

March 2015 DiSabatino CPA Newsletter

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In this issue:

  • Is a Reverse Mortgage the Solution?
  • IRS Announces Annual Scams
  • Tax Breaks for Education
  • Common Missing Tax Return Items

This month:

  • March 8th: Daylight Savings Time Begins
  • March 16th: Due Date for 1120, 1120S Corp. Tax Returns

This month's issue outlines the benefits and risks of reverse mortgages, includes a recap of all too common IRS tax scams, reviews some common educational benefits and provides a list of "frequently missing" information that can often hold up filing your tax return.

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February 2015 DiSabatino CPA Newsletter

February 2015 DiSabatino CPA Newsletter

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In this issue:

  • There is still time for Retirement Funding
  • Maximizing Your Refund Power
  • So You Think You are Hip
  • The Benefits of a Sole Proprietor

The Month of February:

  • Receive all 1099s and W-2s
  • Set up Tax Appointment
  • Rebalance Investment Portfolios
  • February 14th: Valentines Day
  • February 16th: Presidents Day
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