Read the rest of this entry »
The number of tax brackets will be reduced from seven to three, and the top marginal income tax rate will be reduced from 39.6% to 33%.
Personal exemptions will be eliminated.
Standard deduction for married filing jointly will rise from $12,600 to $30,000.
Itemized deductions will be capped at $200,000 per household.
Mortgage interest deduction will be eliminated.
Tax rate will be reduced from 35% to 25%.
To a large extent, the election of Donald Trump is a repudiation of globalization by a large segment of the US electorate. Even though the country as a whole has benefited tremendously from globalization, those benefits have by and large bypassed working-class folks.
Before 2000, Apple made all of its computers in the US and its market cap never rose about 10 billion dollars. Since then, Apple has subcontracted all of its production overseas and only kept design and marketing in US soil. The result?
Apple has become the most valuable company in the world with a market cap of over $600 billion even though they only have 66,000 employees in the US.
At the same time, Apple’s contract manufacturer Foxconn directly employs over 1 million workers in China. The supply chain to Foxconn employs another two million people. Read the rest of this entry »
- I went to San Francisco to study improvised musical theater and performed at the Bay Front Theater for a 45 minute set of musical story entirely improvised on stage.
- Against all odds, I kept Storyfest Short Slam, a short storytelling contest, alive and strong at the Bethesda Writer’s Center.
- I visited my English teacher whom I had lost touch with for 30 years. I couldn’t have accomplished this much in the US without him. I went to say thank you to him personally.
- I went to Guangzhou for my high school reunion and took pictures with my female classmates for the first time. (Back then we didn’t hang out with the opposite sex.)
- At Leadership Montgomery homecoming, I acted out Michael Jackson. Read the rest of this entry »
With the election of a Republican president and a Republican Congress, the tax Wheel of Fortune is spinning again. Since it’s December 2016, you will have to make an educated guess and place your bet now before the wheel comes to a stop.
Tax cuts are very likely, as is a cap on deductions. According to President-elect Trump’s tax proposal, the seven tax brackets will be reduced to three, the top marginal rate will be reduced from 39.6% to 33%, and the 3.8% Obamacare surtax on investment will be repealed. However, itemized deductions that include mortgage interest and charitable donations will be capped at $200k for joint filers.
If you make a few smart moves now, you can potentially save big.
- Delay recognition of incomes and accelerate recognition of expenses/deductions.
- Maximize retirement savings
- Take capital losses.
- Front load your charitable contributions
You can use a donor advised fund to front load your charitable contributions. Take my situation,for example. I typically give about $3000 a year to charities. I now have a d Read the rest of this entry »
A few months ago, I stumbled upon a report about a homework essay written by a nine year old girl, Jia Jia, in rural China. The title of the essay was “If I live to be a grownup 如果我能长大.” It turns out Jia Jia suffers from thalassemia, a blood disease that requires a blood transfusion every 40 days. Without them, she would die. Jia Jia was abandoned by her own parents because they could not afford the medical treatments, but her grandmother refuses to give up on her.
Jia Jia is very aware of her own mortality, but she still has dreams. In the essay, she wrote how she was heartbroken to see her grandmother weep because she did not have enough money for her granddaughter’s treatment. She also wrote that if she lives to be a grownup, she wants to take care of her grandmother so she never has to worry about her again; she wants to become a doctor, so she can treat those people who can’t afford medical treatments.
I was so touched by the overflow of love despite their tragic situation that I called the reporter to get the grandma’s phone number and home address. Read the rest of this entry »
When I was in California last week, I met with a prospective client and did a second-opinion financial review of his situation. He has $5mm in his company’s ESPP (employee stock purchase plan.) I can’t help but feel a bit dizzy, that feeling you get when you’re standing on the edge of a tall building without any protection.
I have a friend who was a senior engineer at MCI Worldcom. He also participated in this company’s ESPP. In only a few years, Worldcom went from being a no-name, little known company to acquiring the second largest telecom at the time – MCI, and its stock price went up tenfold. The value of my friend’s ESPP account went from $300k to over $3mm and he looked extremely smart by not diversifying at all.
The rest of the story you all know. MCI Worldcom filed for chapter 11 in 2002 due largely to corporate fraud committed by their executives. Its stock price plummeted to zero and my friend lost every dime in his ESPP.
So what exactly is an ESPP?
An ESPP enables a company employee to purchase company stock through payroll deduction.These kind of plans are very popular among high-tech companies because they are considered a very effective way to align the interests of the employees and the firm. Read the rest of this entry »