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Is Retirement Still a Reality?

Is Retirement Still a Reality?

Is retirement still a reality? Yes, but it’s a shifting and evolving reality.

“Retirement” Is Outmoded:

Traditional notions of “retirement” are outmoded. In particular, the expectation that people should want (or be forced) to stop working at age 65 no longer makes sense in a world in which people live longer, live healthier as they age, and the ratio of old to young is considerable and growing.

Yet as longevity has increased over the past century, we’ve tacitly tacked all the added years on at the end. Apart from the undesirability of making “old age” the longest phase of one’s life, it’s unrealistic to expect that most workers will be able save enough over the course of a 40-year working life to fund a possible 30-year (or longer) retirement.

There should be no hard boundary on where work ends and retirement begins. Instead, we need to think in terms of a new “life script” that allows for greater flexibility, time off or part time work mid-career, more opportunities for education and retraining across our life course, and “phased retirement” in which people reduce their hours, shift into less demanding roles, and so on, but not abruptly leave the workforce at some pre-set (and arbitrary) age.

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Sticker Shock in Richardson

Sticker Shock in Richardson

I officially live in a “HOT” place.  No, I am not talking about August in North Texas.  I am taking about the real estate in my neighborhood.

Just like many of you, I got sticker shock when I received my 2016 Notice of Appraised Value from the Dallas County Appraisal District.  Since 2013 real estate in North Texas has been rising and I have experienced it.   How much is my increase?

2013   Base year

2014   +3.27% Increase

2015    15.35% Increase (capped of course at “only” 10% for tax purposes)

2016   9.22% Increase

3-year increase = 27.84% increase in three years.  OUCH

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How Much is Your House Worth?  2016

How Much is Your House Worth? 2016

Check your mailbox.  You are about to get a shocking notice from the taxman.  No not the IRS, your local County Appraisal District.  Don’t faint when you open the notice and see the increase in your property valuation.

All of these new Texan’s that are moving her for jobs are looking for and buying houses.  With the inventory of new and resale houses at a historic low, it is simple economics.  A lack of supply with an increased demand equals an increase in price.

How much are houses increasing?
According to several of the local county chief appraisers. the increase is spectacular.  In Denton County, chief appraiser Rudy Durham says. “A decade ago first-time homebuyers were in the $150,000 range now it’s $250,000.”

But the real sticker shock is in Collin County where the average house will appraise for $312,000.  That is a 9.5% increase over 2015, where the average house was $285,000 according to Collin County chief appraiser Bo Daffin.

What can you do?

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Top 5 Overlooked Tax Deductions

If you’re like me, you’d prefer to pay as little as possible in taxes each year. To help you save your hard-earned money, here are 5 commonly overlooked ways to save money at tax time

1. State Sales Tax

Thankfully living in Texas we do not have a state income tax. However, we can deduct Sale Tax as an itemized deduction.  The IRS even helps you calculate the state sales tax using its Sales Tax Deduction Calculator. In addition, if you have a large purchase such as a vehicle or a boat, that sales tax is added to the calculated amount you can deduct.

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Can I deduct that?

A high percentage of the questions a CPA gets this time of year, begins with the simple question.  “Can I deduct that?”

Yes, if it is “Ordinary and Necessary.”

But what exactly do “ordinary and necessary expenses” include?  This also depends on your business.  For instance, if you own a retail store, the IRS wouldn’t expect to see meals and entertainment expenses, travel expenses or auto expenses taken as tax deductions. However, if you are in sales, those expenses could be expected, based on the assumption that you would regularly take clients out to lunch, drive to (more…)