Dayspring Financial Ministry
CPA , Financial Counselor, CRPC, AWMA
Born and raised in Virginia, John passed the CPA exam before graduating from Virginia Commonwealth University and beginning his career at a “Big-8” accounting firm in 1987.
After two years in public accounting, he accepted employment with a client and rose through the ranks in private industry. Desiring to work in a more diversified environment, John started his own accounting practice in 2000 and added personal financial coaching services in 2012.
John resides in Hanover County, Virginia with his wife and children. He is active in his church, enjoys finishing a good run or workout at the gym, and leads personal finance classes in the community.
BS, Accounting, Virginia Commonwealth University
The recommendations provided are educational in nature and not intended to be specific recommendations for any particular individual. The goal is to educate and inform readers of available options, with the ultimate decision being theirs. Please consult the appropriate tax, investment, insurance or financial planning expert before making any final decisions.
John Madison with Dayspring Financial Ministry
Great idea to plan ahead. First, you're doing the right thing by applying the extra $2,500 per month to the auto loans. Continue to execute your plan until both are paid in full. I'm assuming you have no other debt, besides the mortgage that you mentioned.
Once that step is complete, I'd first recommend that you build an emergency fund of three to six months of expenses (here's a post to help decide the right amount for you). Once that is complete, make sure you and your wife are saving 15% of your income into accounts for your retirements. This may be a 401k, traditional or Roth IRA, brokerage account(s), etc. Should you reach that goal, then focus on saving for your children's (if any) college costs. If you have that covered as well, then look toward paying extra principal payments on your mortgage. Note: these are general recommendations and, at times, a different plan would be appropriate for some people. I'd need to know more about your situation to determine the proper steps for you.
Thanks for our questions and please contact me if I can be of assistance.
John Madison, CPA
There is no way to know if $45,000 in 2029 will be worth more or less than $20,000 today, as future inflation is unknowable. Here's the way I like to a consider question like this: Let's assume you don't own the land, that it is worth $100,000 today and you had that much money in a savings account. Would you buy the property now with your savings? If you would, then you consider it to be a good investment and it probably makes sense to hold on to it (even though the future gains may not happen). If you wouldn't buy it now, then sell it.
Generally speaking, whether you should keep or sell an investment should be examined from the perspective of "would I buy it again?" If you wouldn't, it shouldn't be in your investment portfolio. Of course, things like potential capital gains tax may alter the answer to that question. But viewing the question this way often leads to the right answer for you.
Thanks for the question and best of luck to you. Please contact me if you have any other questions!
Yes, you are eligible to collect a survivor benefit from your deceased spouses earnings record as you are 60 years old. However, two issues to consider: (1) the benefit will be significantly discounted for collecting so early, and (2) depending on your earnings, some or all of the benefit may be further reduced. For 2019, the benefit would be reduced by $1 for every $2 of earnings above $17,640. Since you're working full-time, your earnings may well be high enough to reduce the benefit to zero.
Sorry for the loss of your spouse in 2012.
Best of luck and be sure to contact me if you have any additional questions. Always happy to help!
Single-member LLC's (meaning you are the only owner) are typically disregarded entities for tax purposes and the tax nature of the LLC activity stays the same when it flows through to your personal return. Said another way, LLC ordinary income is taxed as ordinary income on your return. LLC capital gains are taxed as capital gains on your return. So, to answer your question, No, the LLC structure will not negate the advantages of capital gains tax treatment.
Let me know if you have any other questions! Thanks for your question.
If the account is titled as joint owners with rights of survivorship, the second owner automatically becomes the owner of the account upon the death of the first. The account will not go through probate and the will has nothing to do with the account. On the other hand, if the account is held as Tenancy in Common, the second owner doesn't automatically own the full account and the will controls who receives it (and it will need to go through probate).
It comes down to how the account is titled! Contact me if you have any other questions.