Tips on Choosing a Tax Preparer


1. You should always ask if the tax preparer has an IRS preparer tax identification number (PTIN).

2. Important credentials are certified public accountant (CPA) or/and an enrolled agent (EA).

3. It is best practice to obtain a written agreement for service fees.

4. A tax preparer should…

  • Be reachable during tax season.
  • Be up-to-date. The Tax Cuts and Jobs Act made big changes to the U.S. tax code.  A tax preparer should be aware of these changes and how they might affect you.
  • Know the requirements of the states and localities where you are required to file.  Ask upfront to make sure that your tax preparer knows – and can handle – the filing requirements of all states and localities required.
  • Be upfront about the time to prepare and deliver your tax return. You should receive an idea of how long it will take for your tax return to be completed and upon completion, receive a complete copy of your tax return.
  • Be organized. A reputable tax preparer should be able to explain what documents are needed to complete an accurate tax return.

– Your Fortis Tax Team

March 7, 2019

 

Sources:

https://www.forbes.com/sites/kellyphillipserb/2019/02/07/how-to-find-the-perfect-tax-preparer/#17dad42a16f9

https://www.irs.gov/newsroom/irs-urges-taxpayers-to-choose-a-tax-preparer-wisely-for-the-filing-season-ahead

Are Hedge Funds Really Worth the Fees They Charge?

From the Desk of Our Managing Partner, Randy Hubschmidt

As Bloomberg’s Nir Kaisser so adroitly pointed out in his recent Opinion piece, money continues to flow in to hedge funds even as hedge funds continue to underperform.

Back when there were fewer hedge fund managers, there was less competition for good deals and hence, more opportunity for tremendous returns.  Just as more entrants chase the same (or similar) strategies, reversion to the mean inevitably occurred. High fees, low tax efficiency and illiquidity all add up to significant underperformance.

Sound familiar?

As many of you know, my colleagues and I at Fortis Wealth have been ardent advocates for building TOTAL wealth, not chasing fads.

As shown in the chart below hedge fund assets have exceeded pre-2008 levels.  The 10 year bull market has emboldened investors to once again roll the dice…

Notice the spread between the HFRI Equity Hedge Total Index and the Bond Index shown in the chart below.

 

Conclusion

If you’d like to learn more about our unique philosophy for managing wealth, visit our website www.fortis-wealth.com

October is Cyber-Security Awareness Month – Week 4

October 2018

Here at Fortis, we believe cyber-security is of the utmost importance, and we have made cyber-awareness a top priority for our Clients, Colleagues and Friends.  October is National Cyber Security Awareness Month.  Fortis is promoting cyber security by sharing weekly tips and information during the month of October.

 

Cyber Security and Social Media

The ubiquity of social media can’t be understated. It effects the vast majority of our population – ranging from children to people well into their retirement years. As such, safeguarding these connections must be a top priority.

Earlier this month, some 30 million Facebook accounts were compromised due to a security breach. In addition, a few dozen accounts were removed from Facebook due to Russian companies who create biometric software for the Russian government extracting data from the social network. The companies were suspended by Facebook for policy violation. While these widespread acts can be punished, there are other heinous acts such as cyberbullying, stalking or harassment that are more specifically targeted social media violations – particularly among teens – that can be more difficult to track. Predators may use social media as a way to build a relationship with children, or could use account information to stalk or even harm them. Teens can use it to spread rumors, or share unflattering images. Unfortunately, in extreme cases, victims have taken their own lives. (more…)

October is Cyber-Security Awareness Month – Week 3

October 2018

Here at Fortis, we believe cyber-security is of the utmost importance, and we have made cyber-awareness a top priority for our Clients, Colleagues and Friends.  October is National Cyber Security Awareness Month.  Fortis is promoting cyber security by sharing weekly tips and information during the month of October

 

Parenting in the Digital Age & the Best Software to Help in 2018

from PC Magazine

Modern kids have never known a time when they couldn’t connect to the entire world via the internet. In fact, they probably spend more time online than anyone else—certainly more than their parents. If you are a parent, this presents a problem, as there are explicit, disturbing, and illegal sites on the web that you don’t want your kids to encounter. Furthermore, with the ever-increasing number of devices that kids use to connect, you simply can’t supervise every moment they’re online on your own. That’s where parental control services can help. This software gives you the ability to block unwanted web content, limit screen time, restrict the use of risky applications, and more. Basically, these services are a way to help keep your kids safer on their computers and mobile devices. (more…)

October is Cyber-Security Awareness Month – Week 2

October 2018

Here at Fortis, we believe cyber-security is of the utmost importance, and we have made cyber-awareness a top priority for our Clients, Colleagues and Friends.  October is National Cyber Security Awareness Month.  Fortis is promoting cyber security by sharing weekly tips and information during the month of October

Our House is a very, very, very SMART house

Image Source

Is your house too smart for its own good?

When Graham Nash of Crosby Stills and Nash wrote “Our House” in the 1970s I’m sure he never imagined that houses of today would be controlled by devices.

While I listen to you play your love songs all night long for me, only for me.’ – Is he talking to Alexa?

Life used to be so hard. Now everything is easy ‘cause of you.’ – Can you imagine life without a smart phone?

(more…)

October is Cyber-Security Awareness Month – Week 1

October 2018

Here at Fortis, we believe cyber-security is of the utmost importance, and we have made cyber-awareness a top priority for our Clients, Colleagues and Friends.  October is National Cyber Security Awareness Month.  Fortis is promoting cyber security by sharing weekly tips and information during the month of October

Cybersecurity statistics that small business owners need to know

Data breaches and ransomware at large companies dominate the headlines but recent data indicates that small businesses suffer the most malware incidents. There are many smaller scale attacks that are having huge impacts on small business. If you are a small business owner, here are 5 things you need to know:

1. 58% of malware attack victims are categorized as small businesses. (Source)

2. Not only do small businesses suffer more infections, the frequency of attacks appears to be on the rise. According to the Ponemon Institute’s 2017 State of Cybersecurity in Small & Medium-Sized Businesses report, attacks increased from 55% in 2016 to 61% in 2017. It’s not that cyber criminals are explicitly targeting small businesses, but it’s more likely that small businesses simply present more vulnerabilities. It’s often a matter of having inadequate protection.  (more…)

September is Life Insurance Awareness Month

Buying any amount of life insurance is based on several factors – your income, how many dependents you have, and your debts and other financial liabilities. Your own personal preferences and risk tolerance were also considered when you decided what type of policy to buy. All of these things can –and likely will –change over time. When is the last time you reviewed your current insurance to make sure it still makes sense for you and your family? Is it keeping up with your evolving financial situation so that you and your loved ones can live life confidently?

When to review your life insurance program

Like other aspects of your financial life, your life insurance should be reviewed periodically. If that hasn’t happened, here are some situations that should prompt you to do so –

  • You have married or divorced
  • You have a new child
  • You have changed jobs or careers
  • Your health has changed
  • You have purchased or sold a home
  • You have started or sold a business
  • Your children or others are no long dependent on your income for their needs
  • You are about to retire
  • Your net worth has changed
  • Your legacy goals have changed

Don’t Delay

Families grow, careers progress, needs change, your plans and goals shift. You need to make sure your life insurance keeps up.

Your Fortis Wealth team has the expertise and resources to help you – Call to schedule a life insurance review today.

September is Life Insurance Awareness Month, a nationwide campaign created in 2004 by Life Happens. Life Happens is an organization dedicated to educating consumers on financial products and topics.

Fortis Solutions, LLC is a licensed insurance agent under laws of the Commonwealth of Pennsylvania and is providing this information for educational purposes only. Fortis Solutions LLC may sell and service certain insurance products.

Investment Opportunities in Student Housing

Demographic and macro-economic trends favor this alternative to traditional investment.

By Randy Hubschmidt
Fortis Wealth, Managing Partner

Key Takeaways

  • Investment in student housing is approaching record levels.

  • Student housing generally weathers recessions—and rising interest rates–better than most other asset classes.

  • Gaining access to this asset class remains a challenge for individual investors. Think twice about being a do-it-yourselfer.

With college enrollments continuing to rise and the stock market expensive by historical standards, student housing has become an increasingly attractive alternative to some traditional investments. Student housing transaction volume totaled a record $9 billion in 2016, a 62-percent increase from 2015, according to a report by Axiometrics. After a brief pause in 2017—more a statistical anomaly than a market trend–three-quarters of investors surveyed by CBRE expect to increase their exposure to student housing in 2018.

The biggest challenge for investors of student housing is gaining access to this asset class. On the private side, we’re seeing a tremendous amount of investment in that asset class. It’s more difficult for clients and other investors to get access via the public markets.

Unique advantages of student housing investments

Unlike many other investments, including traditional real estate, student housing is generally recession-proof. That’s because young adults tend to go back to school when the economy is soft and job prospects are meager.

SSSource: National Center for Education Statistics

Another advantage is that students tend to sign one-year leases. It’s analogous to buying a one-year CD. The rates will reset annually, which can work to your advantage in a rising rate environment–or in this case–a rising rental market environment. Additionally, if the property is desirable, well maintained, has good amenities and is located close to campus, renewals of those one year leases tend to occur well in advance of their anniversary date. That’s because kids who know they will be attending that school the next year will once again want to renew their apartment lease long before the September start of the school year. Both occupancy rates and renewal rates tend to be VERY high when it comes to student housing.

What are the best ways to invest in student housing?

Sure, you could purchase an apartment building and turn it into student units. But, one of the difficulties with “turning” an existing apartment building in the student housing market is that you run the risk of alienating your current tenant base as you start to transition that asset from multi-family tenants to student tenants. These groups tend to have different schedules and different tolerances for noise. You could also have issues with local laws whereby privately-owned student housing may not meet the local municipal ordinances.

Risks associated with student housing investments

One of the biggest risks, as with any real estate investment, is competition in the marketplace. One needs to be aware of competing projects both existing and in the works. Similarly, the schools themselves could elect to build their own on-campus student housing. Real estate continues to be local in nature and myriad issues could affect the marketability and desirability of a project.

Long-term outlook for student housing as an investment sector

A college education continues to be in high demand, and there doesn’t appear to be any reason for this to subside. And so long as a college education is valued, the need for student housing will be there. Certainly, cost will be a factor. But, as college enrollment continues to increase, this asset class should continue to perform well. As previously stated not only does it tend to be somewhat recession proof, history has shown that enrollment actually increases as the economy stalls and jobs become more difficult to find. And as long as that demand continues there should continue to be demand for housing.

According to Axiometrics data, U.S. college enrollment growth has increased by 6.4 million students over the last 20 years and the 14 to 17 year-old demographic continues to grow compared to previous generations. All these factors continue to attract investors to an investment space that is still considered young by commercial real estate standards.

Conclusion

If you or someone close to you is concerned about your lack of diversification or wealth building strategies, please don’t hesitate to contact us.

Business Owners’ Potential Business Exit Worksheet

Click Here to Print

1. What motivated you to start your business?

 

2. How important is your business to your personal identity?

 

3. Is the business your primary source of income? If not, what is?

 

4. How much time do you spend working ‘in’ the business rather than ‘on’ the business?

 

5. Which of the following best describes you? (circle one)

  • Wealthy but I would prefer to continue to work
  • I need to continue to grow my business if I want to own an asset that will eventually make me wealthy
  • I’m already wealthy and ready to exit my business in the next 1-3 years
  • I wish I had sold the business already

 

6. What, in your opinion, is the #1 thing you can do to grow and protect the value of your business?

 

7. What aspects of your business keep you up at night?

 

8. There are many ways to exit a business, of the following six options, which are the two that you find the most likely and compelling? (Circle two)

  • Gifting or sale to member(s) of your family
  • A buyout made by your business partner(s) or your co-shareholders
  • A management buyout by one of your essential manager employees or a group of essential manager employees
  • A sale to a large group of your employees (ESOP etc.)
  • A private equity sale or recapitalization – selling your business, or a significant part of your business, to a buyer that would like to buy, improve and re-sell (or possibly hold) the business
  • Sale of the entire business to a practitioner in the same business or a related industry
  • Public offering of company stock (IPO)

 

9. What valuation method do you use to measure the value of your business (EBITDA multiple, Discounted Cash Flow, ‘Back of the Envelope’ etc. etc.)

 

10. How much money do you believe you need in order to maintain or improve your lifestyle after you are no longer taking a salary from your business?

 

11. Let’s talk about your team. Do you regularly (at least once per year) consult with the following 5 types of advisors? (Circle all that apply):

  • Accountant
  • Estate Attorney
  • Corporate Attorney
  • Financial Advisor
  • M&A Advisor (business broker, investment banker etc.)

 

12. Does your team of advisors coordinate their planning and advice for you? How often do they meet to review your comprehensive plan?

 

13. How often do you and your co-owners set aside half a day for a formal ‘shareholder’s meeting’ designed to jointly make business decisions and solve problems in the business?

 

14. How recently have you updated your shareholders (buy/sell) agreement? Does it include your most recent valuation? Is it adequately funded by insurance?

 

15. What are the best methods you’ve used to attract, retain, and reward your key employees?

 

16. Would your business be likely to suffer a financial loss if you or essential employee(s) were lost or incapacitated?

 

17. Do you or your company own any life insurance policies for business succession, buy/sell, disability, deferred compensation or retirement purposes?

 

18. Have you done any advanced estate planning for yourself and your family (giving away company stock, living trusts, life insurance, charitable planning)?

 

19. Have you updated your advanced estate plan to reflect recent changes in your business or recent tax-related legislation passed by Congress?

 

20. Would you be interested to have a second opinion on any of your planning work that we have asked you about on this worksheet?