The Triad Perspective
     


Triad Investment Management, LLC is a SEC-registered investment adviser based in Newport Beach, California.  We manage portfolios, including retirement and corporate accounts, and provide investment counsel to our select group of clients, which include:
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Merry Taxmas

Tax simplification.  It's a lofty goal that would save millions of hours of work for taxpayers, accountants, lawyers, etc.  Maybe even reduce the sales of aspirin and other headache remedies. 
 
Alas, despite the best efforts of the folks in Congress and the White House, the recently passed tax bill is far from simple.  In fact, I think you could call this thing the Accountants Will Find Unusual Loopholes--AWFUL--Tax Bill.
 
What do sausages and laws have in common?  They're the two things you should not watch being made, unless you want indigestion.
 
The Tax Cuts and Jobs Act of 2017--the official name, although I like mine better--was made in the Congressional Sausage Factory, using a blend of seasoned lobbying and a last-minute dash of horse-trading that leaves a lot to be desired.  In my humble opinion.
 
While the 2017 tax bill doesn't simplify taxes, it does lower tax rates for individuals.  Corporations get a cut in the corporate tax rate from 35% to 21%.  Unless you are a so-called pass-through entity, such as a partnership or LLC.  Then life gets more complicated.
 
In exchange for lower tax rates, personal exemptions and deductions for state income taxes, property taxes and mortgage interest are significantly reduced.  For those of us in high tax states--hello California!--and with mortgages, the lower tax rates are in most cases more than offset by the loss of deductions.
 
If you already have a simple tax return, you probably won't see much difference in complexity.  But if you have lots of itemized deductions or run a small business, especially a service business (don't ask why) --- you're going to be spending more time--and probably more money--with your tax preparer.
 
I'd suggest getting an early start on figuring out what this means for you.  If you do your own taxes, get a tax preparation program and see how you're affected.  If you use a tax preparer, start a discussion early next year.
 
You might find the tax bill puts more money in your pocket.  You might find it takes money out of your pocket.  Regardless, your tax preparer is likely going to be smiling all the way to the bank.

 
"Growth Industry"
-John Heldman, CFA




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