Well… the headline of the story was more grabbing than the actual content….but heck it worked on us, and grabbed our attention….
Here are the key points from the IRS article:
1. Gather tax paperwork and records for accuracy to avoid missing a deduction or credit.
Some information taxpayers need before they begin includes:
- Social Security numbers for everyone listed on the tax return,
- Bank account and routing numbers,
- Various tax forms such as W-2s, 1099s, 1098s and other income documents or records of digital asset transactions,
- Form 1095-A, Health Insurance Marketplace statement,
- Any IRS letters citing an amount received for a certain tax deduction or credit.
We are good with this… a little obvious, but ok… Measure twice cut once and be safe! Onward ….
2. Remember to report all types of income on the tax return. (We would add, reported or not!)
This is important to avoid receiving a notice or a bill from the IRS. Don’t forget to include income from:
- Goods created and sold on online platforms,
- Investment income,
- Part-time or seasonal work,
- Self-employment or other business activities,
- Services provided through mobile apps.
We would add, just because you did not receive a tax notice, DOES NOT mean the IRS did not and is looking for the appropriate notation on your tax return (Huge amount of time this occurs with cashing Series EE bonds) … a missing item is an easy automated paper letter audit….and as mentioned here absolutely requires a response
From the afore mentioned post :
Amazingly nearly 2/3 of audits, which are almost all done by paper due to the cost of a field audit are not answered, resulting in a claim on the taxpayer. Bottom line, make sure you show the IRS that you’re answering their questions in a timely fashion and expect a paper computer driven notice.
3. File electronically with direct deposit to avoid delays in receiving a refund.
We are really good with this one, and have been encouraging ES payments electronically for some time now.
Ok… that is about the end of what we like in the article and what applies to everyone that is reading this post….
We find the IRS reasonably fair… sometimes they lead with you are the bad guy trying to cheat…but this is usually diffused with a nice appropriate timely answer….
Have a Great “Basic IRS Tips Review” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
ODTE Zero Dated To Expire – Advanced Analysis – Zero Date to Expire Options …
The following is a review/behind the curtains look with us, and, is well…. advanced stuff… if you only recall that we spoke of it, we consider it a success, just know we are watching and by no means do you have to teach it…. you have been exposed to something important, but technical that you will likely only see once something has occurred down the road and it may not occur… so no headaches, just a quick read to know what is happening…
As the calendar turned, the goal of a monthly special post was once again desired. Longer time followers, may recall we did a “Back to Basics” multi part series that was met with HUGE applause…. at the beginning of last year 2022.
We even set a special web page (here) and plan on doing a series of 1-2 Minute videos for each subject AND may make a special electronic and paper pamphlet to give pro-bono for those that may find it helpful.
2023 Monthly Series – Advanced Analysis
Rattling around in our head this time, the exact opposite of “Back to Basics” – “Advanced Analysis” – What we are looking at and why!
The thing about this analysis unlike our “Back to Basics” … Our definition of “Advanced Analysis” is fast moving, immediately relevant but behind the scenes of popularity ….and likely not seen in ANY mainstream media or other outlets… Because of this fact, we have no idea of the occurrences … monthly is a goal, but not a promise for obvious reasons…
So here we go-
Our First Part –
M2- What it is and why is it important!
Coded Advanced Analysis – Part 1 of this series, was about the importance of money supply, the massive shrinking of it (even more now, we are still watching) and what effects could come!
ODTE – Zero dated to Expire Options
Options are time dated instruments used to express a desired result upon a directional movement of an asset/investment with a specific time to expiration.
Easy examples include hedging of a security, whereby if it drops in value, your option goes up in a similar value to minimize the net loss of the asset…. there are many more, but this is one of the easiest to understand and very popular.
Historically, options have had maturities of months, quarters and even years. Investors know and understand that as the option gets closer to expiration, the “time value” and value of it goes away.
Meet the new FAD – ODTE – Zero dated to Expire Opions
Just as the title implies, these are hours of options, given they do not even last one day… and they have become extremely popular as of late…. and for all practical matters, are more like gambling than hedging or investing….
Here are the first 10 or so most active options from OIC (Options Industry Council) on Friday February 3, 2023:
Almost all of these are same day or ODTE options….
Why do we care?
For every options contract that is traded, any contract that cannot be matched to another investor, the dealer must offset/hedge that risk,…. given the massive increase in volumes, dealers are left with no matching investor more and more frequently….
With the sudden popularity of these ODTE’s, some have found they can somewhat control the price of the indexes or whatever they are trading for the day.
Currently players are pushing indexes and others UP, possibly overstating values…. What happens if/when they switch sides, which is easy as pushing a different side of the options?
Very short term, yep, and only a day, yep, but stack multiple days on one another and you can get a large variance of price from reality…. FOR A WHILE!
So now you know, these new popular ODTE’s can cause prices to vary from where they should be….
Have a Great ODTE Analysis Day!
John A. Kvale CFA, CFP
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Posted in Advanced Analysis, General Financial Planning, Investing/Financial Planning, Market Comments
Tagged CBOE, ODTE, OIC, options, Options Industry Council, Zero Dated to Expire