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A. Francis & Associates, inc

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Reduce Your Taxes by Putting the Right Assets in Your IRA

Tax and Financial News

April, 2024

Most people know the basic concept that certain types of investment accounts are tax-sheltered while others are not. Think 401(k), 403(b), IRA, and Roth IRA accounts, for example. What most people are not aware of is how you split your investment positions between your taxable and non-taxable accounts, which can result in major tax savings.

Asset Allocation and Location

One of the core principles of investing is to have an appropriate asset allocation that aligns with your risk tolerance and goals. In other words, how much of your investable net worth is in cash, stocks, bonds, precious metals, real estate, alternative assets, private investments, etc? Once you have this determined, the next consideration should be the location of these assets, primarily meaning whether you hold them in a taxable or tax-sheltered account.

The first core principle behind asset location positioning is that bonds and other fixed-income investments get the highest priority within tax-sheltered accounts because they pay a high-taxed ordinary income. Stocks that pay qualified dividends may be taxed at the more advantageous long-term capital gains rate, so they are typically better in taxable accounts.

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Taking a Closer Look at Trial Balances

Accounting News

April, 2024

What is Burn Rate, Defining Burn Rate, Gross Burn and Net Burn

A trial balance is an accounting tool that helps businesses determine if the double entry accounting system has any mathematical errors. Once the trial balance is worked through, and the total debits and total credits equal each other, we know there are no mathematical errors – but that doesn’t mean it is error free. It is important to determine how it is constructed and the considerations for each step in the process.

Raw Trial Balance

The first is the unadjusted trial balance. This looks at all the double entry bookkeeping journal entries, which records the business’ day-to-day transactions. When beginning to prepare for the adjusted trial balance, the eventual adjusted trial balance will have three column headers: 1. Account 2. Debit 3. Credit.

It should list all sub-ledger account balance totals, the account description and number, along with the final debit/credit balance. It also should document the accounting period, including the starting and final dates.

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April is Financial Literacy Month: How Much Do You Know?

Tip of the Month

April, 2024

Financial Literacy

What started as Youth Financial Literacy Day some years ago is now a monthlong event: Financial Literacy Month. It all started in 2003 when some U.S. legislators got together and decided that we needed more days dedicated to this topic. So, what does that mean for us? Plenty. It’s one month out of the entire year you can dedicate to getting your financial ducks in a row by engaging in fiscally savvy activities, absorbing all the knowledge, and then sharing your learnings with family, friends, and the world.

Prepare the Kids

Unless you went to a school (K-12) that included business/money classes, chances are you didn’t learn basic finance until you were older. That’s why starting kids early in their understanding of how to make deposits and withdrawals and balance their checkbooks is key. Here’s a resource for downloadable PDFs that you can use to help kids understand the basics of banking. You can even read a children’s book on personal finance to your grands or nieces and nephews, something like The Berenstain Bears’ Trouble with Money.

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At A Francis + Associates, we assist our tax clients through efficient compliance and effective planning to help them realize substantial savings. We use a team approach and focus on timely communication to provide our clients with excellent service. Tax partner and specialist involvement ensure that our clients receive the most experienced technical expertise we have to offer.


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