People say "Consult your tax advisor" as if we all have one in our front pocket. I agree with you that many people do not. I think
many people promoting investments try and downplay the tax issues people need to address by using
the phrase. I also think Congress makes some pretty complicated tax laws that are virtually impossible for most people, if not many pros, to figure out and apply correctly.
There are many, many obscure complications in the tax code. Rather than address them, I see "Consult your tax adviser" over and over in SEC
filings about complicated reorganizations that bring along complicated tax issues that need to be addressed. Basically, the company is saying "It's your problem to figure out".
My experience with Turbo Tax has been that it is good, but gets weak as tax issues get more complex. It is also not always clear how to make entries so that the correct tax forms end up being produced.
I can tell you that even in our small part of the tax world (partnership taxation for clubs investing in stocks), there can end up being some obscure tax issues that come up and need to be handled. The good news for clubs is that, in many cases, we can be the "tax adviser" that helps them to make sure entries are made correctly.
But there are many tax issues whose impact will depend on personal circumstances. Articles in magazines cannot begin to address all the possible issues that need to be considered for some tax items.
I agree with you that part of being a knowledgeable investor is understanding the tax issues that come with your investments. If you are unwilling or unable to spend the time to become comfortable doing that, you should definitely seek outside help to make sure your taxes are prepared properly. In many cases, you should also discuss possible investments or types of investment accounts with someone knowledgeable in tax matters before you get into them. There is often a lot more to it than you might think.
Laurie Frederiksen Invest with your friends! www.bivio.com
On Thu, Sep 4, 2014 at 10:25 AM, Mike Jones via bivio.com wrote:
I am amazed at how many people suggest consulting with your 'tax adviser' as if anyone really has one any more. Since TurboTax was introduced, I have been able to handle sales of stocks and rental properties as well as depreciation and consulting expenses without needing a tax adviser.
I believe that people who own a 401(k) need to know how they work and
whether it is to their advantage to, at some point, roll their holdings into an IRA. They can figure this out by reading articles in magazines or on the Internet. If you are wise enough to have saved for retirement, you need to also take responsibility for protecting your assets and that means spending some time learning about your options.
Mike Jones
Wall$treet Wannabees
Bloomington, MN
Mark Eckman on
Laurie,
I agree, but think the answer is much simpler. Said another way, 'consult with your tax advisor' means make a wise choice. Here are some other ways this has been said by people a lot smarter than me:
The only true wisdom is in knowing you know nothing
Socrates
The wise man questions the wisdom of others
because he questions his own, the foolish man, because it is different from his
own
Leo Stein
Life's tough...It's even tougher
if you're stupid
John Wayne
Mark Eckman
On Thu, Sep 4, 2014 at 9:54 AM, Laurie Frederiksen <laurie@bivio.biz> wrote:
Dear Mike,
You raise an issue that is a pet peeve of mine.
People say "Consult your tax advisor" as if we all have one in our front pocket. I agree with you that many people do not. I think
many people promoting investments try and downplay the tax issues people need to address by using
the phrase. I also think Congress makes some pretty complicated tax laws that are virtually impossible for most people, if not many pros, to figure out and apply correctly.
There are many, many obscure complications in the tax code. Rather than address them, I see "Consult your tax adviser" over and over in SEC
filings about complicated reorganizations that bring along complicated tax issues that need to be addressed. Basically, the company is saying "It's your problem to figure out".
My experience with Turbo Tax has been that it is good, but gets weak as tax issues get more complex. It is also not always clear how to make entries so that the correct tax forms end up being produced.
I can tell you that even in our small part of the tax world (partnership taxation for clubs investing in stocks), there can end up being some obscure tax issues that come up and need to be handled. The good news for clubs is that, in many cases, we can be the "tax adviser" that helps them to make sure entries are made correctly.
But there are many tax issues whose impact will depend on personal circumstances. Articles in magazines cannot begin to address all the possible issues that need to be considered for some tax items.
I agree with you that part of being a knowledgeable investor is understanding the tax issues that come with your investments. If you are unwilling or unable to spend the time to become comfortable doing that, you should definitely seek outside help to make sure your taxes are prepared properly. In many cases, you should also discuss possible investments or types of investment accounts with someone knowledgeable in tax matters before you get into them. There is often a lot more to it than you might think.
Laurie Frederiksen Invest with your friends! www.bivio.com
On Thu, Sep 4, 2014 at 10:25 AM, Mike Jones via bivio.com wrote:
I am amazed at how many people suggest consulting with your 'tax adviser' as if anyone really has one any more. Since TurboTax was introduced, I have been able to handle sales of stocks and rental properties as well as depreciation and consulting expenses without needing a tax adviser.
I believe that people who own a 401(k) need to know how they work and
whether it is to their advantage to, at some point, roll their holdings into an IRA. They can figure this out by reading articles in magazines or on the Internet. If you are wise enough to have saved for retirement, you need to also take responsibility for protecting your assets and that means spending some time learning about your options.