Targeted consumption: Buy Black

Monday’s post gave some resources for investing your self-directed retirement funds in your community. Being mindful of where you spend your consumer dollars is another, more common, and easier way to support your community and align your money with your values.

Covid-19 was the prompt that first redirected my attention to supporting local economies, and even before the police murder of George Floyd sparked a human rights war (in the words of Nenna Joiner, founder of Feelmore Adult in Oakland and Berkeley), the effects on small businesses were racially inflected.

I know when these types of things happen, it tends to hit us, black people, the hardest, but it also hits our black-owned businesses the hardest, because we don’t have access to as many funding opportunities as other businesses do. So this is the time to really step up and support your small black-owned businesses.

—Tomara Watkins, founder of Loza Tam

Here are some resources to help you target your consumer dollars to Black communities and Black-owned businesses.

Continue reading “Targeted consumption: Buy Black”

The CARES Act and access to your retirement funds

Monday’s post, about investing your retirement savings in your community rather than Wall Street, mentioned the ability to borrow from your 401(k), 403(b), SEP, SIMPLE, ESOP, or other qualified retirement plan.

I’d like to clarify that you can take such a loan even if you have not taken the plunge into the self-directed retirement pool.

On March 27, the CARES Act temporarily increased the amount you are able to borrow. Ordinarily, you may borrow the lesser of $50,000 or 50% of the vested account balance. The CARES Act increases those limits to $100,000 or 100% of the vested, until September 23, 2020.

You may need the funds for yourself, and it is also possible to lend your wealth to others who need it. Next month, The Next Egg is hosting a webinar on borrowing from your existing qualified plan for community investment. Tuesday, July 17, 12-12:30 EDT.

The CARES Act also waives the ordinary 20% tax withholding imposed on such disbursements. Your plan may also offer a year’s deferral on repayments. Check with your employer or plan administrator for details—employers and administrators may choose not to offer these benefits.

The CARES Act also offers some relief if you need to take a distribution from a plan (for instance, IRAs do not allow borrowing). Any early distribution you make in 2020 will be exempt from the 10% penalty for early withdrawal.

Further, you have options for handling the regular taxation of these disbursements from your traditional IRA. You may choose to allocate the income for taxation across three tax years (and this options is available even if you are not taking early withdrawals). Additionally, you may choose to repay the disbursement within the same timeframe (so, by the end of 2022). Continue reading “The CARES Act and access to your retirement funds”

Investing Your Retirement Savings in Your Community

One of the factors that influenced my decision to return to the US from Canada was the damage it was clear that covid-19 was going to inflict on small businesses and local economies. That’s always been my business niche, and it was wrenching to hear stories of how my friends and past clients were suffering.

Then the police murder, on my new doorstep, of George Floyd sparked a global uprising for human rights and against the deep-rooted, systemic anti-Black racism of the United States. I began thinking deeper about how to use the financial privilege that I have—not just earning my living helping local and POC-directed enterprises survive and thrive, and not just donating, or directing my consumer dollars thoughtfully, but making sure that I know who is benefitting from my retirement savings.

Enter The Next Egg, a community that supports each other in the technicalities of moving our nest eggs out of Wall Street’s pockets and onto Main Street. Within this calendar year, I will be rolling over my retirement savings from a traditional IRA to a solo 401(k), from which I will get to choose how to invest my funds. There is a lot to learn, and even though using my retirement funds for good is a long-standing dream of mine, I don’t believe I would have taken the plunge without The Next Egg‘s support.

I’ll post more here as I go through the process, and I encourage anyone who is interested in doing the same to join The Next Egg (a subscription is $9.99/month) for their “In an Eggshell” webinars on the basics of solo 401(k)s, self-directed IRAs, rollovers, borrowing from your funds, and more. You also get access to videos of all previous webinars, to community discussions, and to a steeply discounted set-up fee for a solo 401(k) (they usually run about $1,000, and you can get yours for $300 through The Next Egg).

See you at Tuesday’s webinar (June 23, 5-6 PM EDT) on COVID, Rebellion, & Retirement!

A screen shot of the The Next Egg's upcoming seminars in self-directed retirement investment in your community. Text in caption.
The Next Egg’s upcoming (June 23 – Oct 16) webinars. Tuesday, June 23, 5-6PM EDT: COVID, Rebellion, & Retirement: A discussion about the role of our nest eggs in this emerging political moment. Friday, July 17, 12-12:30 PM EDT: How to Borrow from Your Existing 401(k) or 403(b). Friday, August 14, 12-12:30 PM EDT: Solo 401(k) Basics. Friday, September 18, 12-12:30 PM EDT: Rolling Over Your Retirement Savings. Friday, October 16, 12-12:30 PM EDT: Self-Directed IRAs.

 

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Du Nord Recovery Fund

I’ve shared a lot of information this week about crowdfunding and taxation, for both recipients and givers. If you are looking to for a way to honor Juneteenth, you can support POC-owned businesses in Minneapolis by contributing to the Du Nord Recovery Fund.

Du Nord Craft Spirits is a Black-owned Minneapolis business that is using its popularity to raise funds to rebuild smaller POC-owned businesses that were affected by the uprising for human rights in the wake of the police murder of George Floyd on Memorial Day.

A cribbage board, two cocktails, and a menu embossed with the Du Nord Craft Spirits logo rest on a bar. Photo by Matt Ryan. Continue reading “Du Nord Recovery Fund”

Crowdfunding and Taxes for Givers

Part 2 of a two-part series.

As covid-19 has shuttered or slowed businesses and the uprising for human rights in the wake of George Floyd’s murder has prompted an outpouring of mutual aid in cities across the US, many people are using crowdfunding who have never used it before.

Just as recipients often wonder if the support they receive is taxable (see Part 1 of this series), givers sometimes wonder about the tax implications of their contributions. The short answer is: there usually aren’t any—so don’t be afraid to give!

Before we go any further, please consider supporting the Du Nord Recovery Fund, which will ensure that POC-owned businesses on Lake Street in Minneapolis will be rebuilt.

In the rare event that giving affects your taxation, what that effect is really depends on what kind of transaction you’re participating in.

A model of the kinds of crowdfunding (donations, gifts, purchases, loans, and equity) anchored on an image of a crowd protesting the police murder of George Floyd.
The five types of crowdfunding transactions are donations, gifts, purchases, loans, and equity. Gifts are the most common transaction in an emergency.

Continue reading “Crowdfunding and Taxes for Givers”

Crowdfunding and Taxes for Recipients

Part 1 of a two-part series.

As covid-19 has shuttered or slowed businesses and the uprising for human rights in the wake of George Floyd’s murder has prompted an outpouring of mutual aid in cities across the US, many people are using crowdfunding who have never used it before.

Recipients often wonder if the support they receive is taxable. The answer depends on what kind of transaction you’re participating in.

A model of the kinds of crowdfunding (donations, gifts, purchases, loans, and equity) anchored on an image of a crowd protesting the police murder of George Floyd.
The five types of crowdfunding transactions are donations, gifts, purchases, loans, and equity. Gifts are the most common transaction in an emergency.

Before we go any further, please consider supporting the Du Nord Recovery Fund, which will ensure that POC-owned businesses on Lake Street in Minneapolis will be rebuilt.

Now, on to the tax implications of crowdfunding. The main question you should ask yourself is: Am I offering anything in return for the contributions I receive?

Continue reading “Crowdfunding and Taxes for Recipients”

Thinking of the Balance Sheet as a Wallet

Non-bookkeepers tend to focus on income and expenses and ignore the Balance Sheet accounts (assets, liabilities, and equity). This can lead to all sorts of problems, like overdrawn bank accounts, unpaid bills, duplicated transactions, understated income, understated expenses, and more.

I find that it can be helpful to think of your Balance Sheet accounts as different pockets within the same wallet. This video walks you through the concept.


 

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The Utopia of Rules

Last week, I wrote about David Graeber’s The Utopia of Rules: On Technology, Stupidity, and the Secret Joys of Bureaucracy in the context of Fortnite Battle Royale.

There, Graeber’s most salient observations had to do with the similarities between fantasy role-playing games and accounting, the role of comics in socializing future leaders, and the tension between the fun of rules-based games and that of anarchic play.

That’s certainly an idiosyncratic list of topics to find in a book that is ostensibly about bureaucracy, and still it doesn’t begin to show the extent of the ground that Graeber covers.

It’s a testament to the fact that bureaucracy—the use of impersonal rules and procedures to regulate public life—is so deeply embedded in our lives that I have a hard time thinking of a society that gives a sharp enough counterexample the make it concisely clear what Graeber means by “total bureaucratization.” Continue reading “The Utopia of Rules”

AlgoRythmics: A Quick Sort Küküllőmenti Legényes

As with any kind of data, there are multiple axes on which you might want to sort accounting data, and many ways in which you can perform that sorting.

If you’re going beyond the basic method of telling Excel to sort your data, you’ll want to know the pros and cons of different sorting algorithms that you might script. I won’t say that the AlgoRhythmics YouTube channel really teaches what a bubble sort is versus a quick sort or an insertion sort, but their demonstrations are a delight nonetheless. Continue reading “AlgoRythmics: A Quick Sort Küküllőmenti Legényes”

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