Francetic Tax Resolution LLC - June 2020

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JUNE 2020




Reruns, Nostalgia, and Getting Back to ‘Normal’

Is this going to be a basketball newsletter from now on? Maybe! I’m not going to lie, ever since March Madness was canceled, I’ve had the game on my mind, and four months on, the obsession hasn’t faded. Last month, I talked about all of the things I learned from playing basketball as a kid and how it shaped my mindset as a business owner. But it turns out that article alone didn’t get the sport out of my system. During social distancing, I’ve been turning to basketball a lot as a mental break from my work (when filing deadlines were extended, so was my busy season). There might not be any new games on TV, but there are plenty of old ones out there to enjoy. Rewatching games from the 1970s, ‘80s, and ‘90s has convinced me that those decades were the golden age of basketball. Back then, basketball was the way it was supposed to be: fierce, pure, and full of talent. That isn’t to say talented players aren’t out there today — they are! But I can’t help but think that overall, the quality has declined. It is more a business and marketing machine today than is was in the past. In the ‘70s, ‘80s, and ‘90s, basketball was a different game. There were fewer teams, and competition to make the cut for them was intense. The game was more physical, too. The players were hands-on, often pushing and shoving each other on the court in a way they’d never get away with today. Those players, like my all-time favorite, Larry Bird, could really handle the ball. In the last couple months, I’ve gotten my fix watching Michael Jordan's documentary “The Last Dance” about his championship run with the Chicago Bulls in the ‘90s and old games played by the 1986 Boston Celtics, which I consider the best NBA team to play in my lifetime. There were five future Hall of Famers on that team: Larry Bird, Kevin McHale, Dennis Johnson, Robert Parish, and Bill Walton. They reminded me that basketball really can be a beautiful game. Now, basketball isn’t basketball anymore, at least not in the same way. There are more teams, the talent is watered down, and the players put a lot more focus on 3-point shots so they can stay out of the scrum in the paint. I miss those old days, just like I miss the times back when things were “normal” before the virus turned life upside down.

Letting myself watch those games from a bygone era and wallow in that nostalgia for a bit was good for me, but it has been even better to move on and move forward. In the past few days, my mindset has shifted from focusing on what’s wrong with the way basketball is played today to focusing on what really is important in life. People tend to take many things for granted until something like COVID-19 comes along and affects their health or the health of someone they love, their ability to support their family or operate a small business, or enjoy the simple pleasures of life outside of the daily grind. So many of my clients have been adversely affected by the pandemic, and it is going to be a long road back for many of them. If this crisis has hit you, your family, or one of your close friends particularly hard, I’m here to help. Don’t hesitate to give out my contact information to anyone who needs some expert advice on how to handle all the new tax laws, disaster loans, and government regulations the pandemic has created. Together, we can get through this and make it out the other side.

Paul Francetic




FIXED INDEXED ANNUITIES When it comes to low-risk, high-return investments, fixed indexed annuities (FIA) are the most attractive option for retirees. In 2018, renowned economist professor Roger Ibbotson conducted research into the return history of inflation, U.S. Treasury bills, government bonds, FIAs, and stocks. Unsurprisingly, stocks offered the highest returns historically, but Ibbotson was surprised to find FIAs came in second, beating out bonds and conventional wisdom. Historically, these investments have produced great returns for individuals who are in retirement or who are about to retire. However, remember that everyone’s circumstances are different. Before making any changes to your portfolio, talk to your financial planner about your options.

As you age, it’s wise to make some changes in order to stay healthy, like your diet or your workout routine. Likewise, your portfolio should be adjusted to reduce risk and protect your financial health. After a bad turn in the market, it can take up to a decade to make your money back. If you want to retire in the next five years, then can you really afford that risk? Reducing your risk doesn’t necessarily mean missing out on high-return investments, though. Here are some low-risk, high-return investments to consider adding to your portfolio as you approach retirement. PEER-TO-PEER LENDING Otherwise known as P2P lending, this investment takes place online. Borrowers are matched with

investors for loans that benefit both parties — lending without the bank. Your risk and potential returns depend entirely on which loans you choose to invest in. The two most popular P2P lending platforms are Lending Club and Prosper, and you can start investing in either platform with as little as $25. REAL ESTATE INVESTMENT TRUSTS When you invest in real estate investment trusts (REIT), you’re investing in mortgages or direct equity positions in various properties. When the stock market is in decline, REITs are a good investment because they’re not corrected with stock exchanges. Plus, their yield is usually higher than the dividends investors get from stocks.


The Connection Between Coronavirus and Financial Transparency

As horrible as things are, though, a tiny silver lining to this crisis might exist. In my experience and from what I’ve been seeing in the media, the coronavirus just might change the way we talk about money from now on. Let me explain what I mean. Talking about money used to be taboo. No one talked about their salaries, their bonuses, or their savings, let alone their debts. Over the years, hundreds of clients have come to me with tax problems they’ve kept hidden from their family or friends because revealing them would mean talking about money. Often, this secrecy is a big problem because it keeps them from getting the help they need until things get bad. However, I think that taboo is lifting now simply because so many people are in the same boat. In March, a survey by The Ascent found that 60% of Americans were worried about money, and I bet that number has only climbed in the last few months. Money problems and fears have become a thing we have in common as a nation, and that

has opened people up to more conversations about their hours, salaries, mortgages, and debts, including the ones to the IRS. The fact that so many Americans are struggling is more than a bit scary, but I think this new level of transparency is a good thing, and I hope it outlives the crisis. If we stay open about our money issues, we can share tips and help each other solve our problems. When you check in with your loved ones this month, I’d encourage you to use this new transparency to help them. Ask how they’re doing financially and what their worries are. I bet they’ll open up! If they do, and you find out they have a tax problem, please share my contact information. I can help them resolve their debt and give them some much- needed peace of mind in these tough times.

You don’t need me to tell you the coronavirus pandemic has hit our economy hard. Nationally and right here in Wisconsin, things are more than a little bit nuts. I still remember reading in The New York Times a few months ago that more than 26 million Americans had lost their jobs, and how it hit me like a punch in the gut.




Do you own a small family business? If you do, or have a friend who does, odds are it’s not really a one-person job. Most married business owners have spouses who help, even if


they don’t get separate paychecks or consider themselves employees. These partnerships can be great, but often, they’re missing out on the tax advantages of officially hiring that spouse when filing a Schedule C. Taking that step is smart for three reasons. First, your spouse will get credit toward Social Security, so they can possibly qualify for a higher monthly payout when they retire. Second, if you’re a Wisconsin resident, you’ll qualify for the full $480 married couple’s tax credit on the state tax return, assuming you each have at least $16,000 of earned income annually. Third, you’ll be able to structure both of your health insurance premiums in your newly employed spouse’s name with the health insurance provider, so the premiums can be deducted as an employee benefit on the Schedule C. This deduction will decrease the amount of your self-employment income subject to self-employment tax (approximately 15%). If your spouse is going to be your first employee, you’ll need to set up a payroll account. Luckily, it’s easier than you might think, and you don’t even have to be a corporation or LLC. All you need to do is apply for an employer identification number (EIN) with the IRS and a withholding tax account number from your state Department of Revenue. I recommend Patriot Software as a payroll processing provider. The cost for one employee is $34 per month, and Patriot will make all of your payroll tax deposits with the IRS and the state and file all of your required payroll tax returns. This past tax season, I had three new clients who were self-employed and had spouses who helped with their businesses. I recommended this strategy, and all three implemented it. Now, they’ll receive significant tax savings when I prepare their 2020 tax returns next spring! If you have any questions about how employing your spouse can save you from overpaying your federal and state taxes, please contact me for a free, no-obligation consultation. And if you’re not an entrepreneur, pass this article on to a friend who is! No one should overpay their taxes.

Inspired by

It’s sweet. It’s savory. It’s the embodiment of summer!


8 oz buffalo mozzarella or fresh mozzarella 8 oz ripe fresh figs, quartered lengthwise Handful of basil leaves, roughly chopped

• •

Flaked sea salt, to taste

Coarse ground black pepper, to taste

Olive oil, to taste


1. Tear mozzarella into bite-size pieces. Arrange on a platter.


Place quartered figs, flesh up, around mozzarella.

3. Sprinkle basil leaves over top.

4. Season with salt and pepper to taste.

5. Drizzle with olive oil.








Listen to Paul Saturday mornings at 7 a.m. on channel 1050 WLIP-AM or stream online at!

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Basketball, Nostalgia, and Getting Back to ‘Normal’ Best Investments for Retirees Is COVID-19 Changing the Way We Talk About Money? A Tax Tip for Entrepreneurs Fig Caprese Salad Have the Olympics Ever Been Postponed Before?




In late March, amid the global spread of COVID-19, the International Olympic Committee announced the postponement of the 2020 Olympic Games. They were slated to take place in Tokyo, Japan, this summer, but they will now happen in the summer of 2021. While this is an unprecedented decision, it’s not the first time that major global events have affected the Olympic Games or which countries participated. Since the inception of the modern Olympic Games in 1896, they have been outright canceled three times — 1916, 1940, and 1944. The first cancellation of the Olympic Games happened during World War I. The German Empire was supposed to host the games in Berlin, but by the time 1916 rolled around, Europe was deep in the trenches of WWI. Many nations had sent their athletes to fight in the war, so the games were canceled. World War II caused the next two cancellations. The 1940 Olympics were initially scheduled to be held in Tokyo. It would have been the first time the games were hosted by a non-Western country, but Japan forfeited the right to host

when they invaded China in 1937. The games were then rebooked for Helsinki, Finland, but after Nazi Germany invaded Poland in 1939 and started WWII, those games were scrapped as well. Since the fighting hadn’t ceased by the time the games were supposed to happen in Cortina d'Ampezzo, Italy, in 1944, the Olympics were canceled again. Though the Olympics have happened on schedule since the end of WWII, the United States has not always participated. In 1980, when the U.S. boycotted the Olympics that were held in Moscow, Russia, in protest of the Soviet Union’s invasion of Afghanistan, 64 other nations followed suit. However, those games still went on as planned and 80 countries participated. The fact that major global conflicts are the only other events that have been catastrophic enough to affect the Olympics might be distressing and elevate anxiety about our current global health crisis. However, it’s important to keep in mind that the Olympics have only been postponed this time, not canceled. We’ll still get to cheer on our favorite Olympians next year.



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