Online Advisor
Timothy W. Tuttle & Associates

Volume 15 Edition 09                Please email comments to                  Sept 2019

Major Events This Month:

For September 2019      

This month:

September 2

 - Labor Day

September 16

 - 3rd quarter estimated tax due

 - Filing deadline for 2018 S corp. and partnership returns that received extension

October 1

 - SIMPLE IRA plan establishment due

Welcome, fall! Pumpkin spice lattes arenít the only thing you should be focusing on this season. For instance, do you know what to do if you receive an IRS letter in the mail? In this issue, youíll find tips about handling this situation. Thereís also advice for business owners about selecting the right employee health insurance, plus a list of ways to help older adults avoid scams. And a few key reasons why you should never skip the fine print when agreeing to terms and conditions.

Call if you would like to discuss how this information relates to you. If you know someone who can benefit from this newsletter, feel free to send it to them.

The IRS Is Not Always Right

A letter in the mailbox with the IRS as the return address is sure to raise your blood pressure. Here are some tips for handling the situation if this happens to you:

Select the Right Health Insurance for Your Business

If you have employees, you know how important health insurance is for your benefits package. It also takes a big bite out of your budget. Selecting the right insurance for your company is extremely important for employee retention and maintaining your bottom line. Here are tips to help you find the best health insurance for your business:

  1. Know the size of the network. A popular way to lower insurance costs is opting for a smaller network of health care providers. Known as narrow provider networks, coverage is limited to a much smaller group of clinics and hospitals than traditional plans. But while the cost savings are nice, employee satisfaction is likely to decline as some of them will have to change doctors to stay in network. When researching insurance options, be sure to compare the network size to industry averages.
  2. Watch for coverage limits. Lifetime and annual dollar limits for essential health benefits were banned in 2014, but limits still appear in other ways. Dental services, for example, are exempt from the dollar limits and often have annual and lifetime coverage limits. Another way insurance providers hedge their risk is by limiting the number of a certain type of visits, like for chiropractic care or physical therapy.
  3. Donít forget prescription coverage. Many health insurance programs donít include full coverage for prescription drugs, so you may need to add supplemental insurance. Pay special attention to the coverage differences between brand name and generic drugs. Also review any deductibles and other limits. Another type of coverage available is a prescription discount program. Discount plans simply charge you a subscription cost that allows you to use a contracted discount.
  4. Understand what isnít covered. When trying to sell you on their plan, insurance providers do a good job showing you what they cover. What can be harder to figure out is what they donít cover. Some of the types of services that may not be covered are vision care, nursing home care, cosmetic surgery, alternative therapies like massage therapy or acupuncture, and weight-loss procedures.
  5. Be prepared to provide employee data. The process of obtaining a quote for health insurance can be an overwhelming task. Health insurance companies will want, at a minimum, a list of employees with some pertinent details like age, sex, coverage details (self, spouse and other dependents), and home zip code. They will want the forms filled out by all employees, even those that are opting out of insurance coverage. If you are working with a benefits broker, they can help you prepare what will be needed in advance to speed up the process.

Shopping for health insurance for your business is complicated. Taking the appropriate time to understand each coverage option and the associated costs will benefit both your business and your employees' well being.

Help Older Adults Stand Up Against Scams

The Consumer Financial Protection Bureau recently reported in financial exploitation cases that older adults lost an average of $34,200. Unfortunately, these funds are often never recovered. You can ensure this doesn't happen by learning more about scams and how to protect yourself. Here are some tips:

Why You Need to Read the Fine Print

According to a recent Deloitte survey, 91 percent of people agree to terms and conditions without reading the legal agreement. While reading through the legally complex language may be slow and painful, itís more important than you think. Here are four reasons why reading entire legal agreements make sense:

  1. You miss a major technicality. Many agreements have an exit penalty that requires you to pay for a period of time after you terminate an agreement. Others automatically renew your agreement for a year with exit penalties unless you tell them in writing you do not wish to renew prior to a key date. In a recent example of missing a legal technicality, eight teachers claimed the Department of Education (DOE) mishandled a debt forgiveness program that promised to reduce student loans after 10 years of public service. In most of the cases, the teacherís application was denied because, according to the DOE, they were in the wrong type of loan or payment program.
  2. You give something away. With extensive agreement documents (PayPalís user agreement is over 50 pages long!), itís easy for a company to add language that grants itself rights to something thatís yours. Here are some examples:
    1. Your identity. Companies like Facebook grant itself rights to use your likeness and personal information for targeted advertising unless you catch the clause and take action.
    2. Your work. If you create a presentation using some online tools, the agreement might allow the site to use the presentation without your permission.
    3. Your location. Most navigation software tracks your location even when not using their application. The same is true with most newer vehicles. The only way to catch these tracking rights is to read the clause in the agreement.
  3. You're not comfortable with the risks. Data breaches are occurring more often and are hard to prevent. To reduce their exposure to litigation, businesses are continuing to add language to agreements to protect themselves. Your job, as the consumer, is to know these risks when signing up for a new service. The more personal information you provide, the more important it is to understand your legal recourse if the supplier of your service is hacked.
  4. You miss something good. Reading an agreement to the end may pay off. A woman in Georgia won $10,000 just by reading her travel insurance agreement. The company, Squaremouth, had a Pays to Read program that awarded a cash prize to the first person to read the clause with a cash prize. For most people, itís more likely youíll find additional benefits that come with the agreement or laugh at some humor injected by the company. Here is an example from social media company, Tumblr: "You have to be at least 13 years old to use Tumblr. Weíre serious: itís a hard rule, based on U.S. federal and state legislation. ďBut Iím, like, 12.9 years old!Ē you plead. Nope, sorry. If youíre younger than 13, donít use Tumblr. Ask your parents for a Playstation 4, or try books."

Consider the Tax BEFORE You Sell

Multiple tax rates hold the key

In times of market volatility or when a financial need arises, it is only natural to consider selling some investments. Understanding the tax consequences is key to making an informed and planned decision. Here is what you need to know BEFORE you sell:

Investment Tax Rates


Tax Classification

Holding Period

Tax Rate


Retirement Accounts: 401(k), 403(b), traditional IRA, SEP IRA, SIMPLE IRA

Ordinary income (when funds are withdrawn from the account)

Determined by the account type (usually withdrawals after age 59 1/2)

0% up to 37%*

There is not a tax event when an investment is sold within your account. The tax rate depends on your annual income at time of fund withdrawal

Retirement Accounts: Roth IRA and Roth 401(k)

No tax on withdrawals

5 years and 59 1/2 years old or older


Earnings are not taxed as long as rules are followed

Short Term Capital Gains (STCG)

Ordinary income

1 year or less

0% up to 37%*

For investment sales such as stocks and bonds

Long-term Capital Gains (LTCG)

LTCG rates

More than 1 year

0% up to 20%

For investment sales such as stocks and bonds

Depreciation Recapture




When you sell property that has been depreciated in prior years, part of your sale price may be taxed as a recapture of this prior period depreciation





A special tax rate applies to gains on the sale of items you collect (like coins and baseball cards)

Investment losses

Ordinary income


Offset benefit: 0% up to 37%

Losses can offset ordinary income up to $3,000 each year

* a 3.8% net investment income tax may also apply to these earnings.

As the above tax rate chart suggests, understanding the tax consequence of selling an investment can be complicated. Your tax obligation could be subject to no tax or up to 37 percent plus an additional 3.8 percent for the net investment income tax. Here are some ideas to consider:

Within retirement accounts

Gains and losses outside of retirement accounts

Remember your investment decisions can often have quite different tax consequences. The best suggestion is to seek advice BEFORE you sell.

How to Handle Negative Reviews

With all the rating services on sites like Amazon and Yelp, it's not a question of whether your business will receive a negative review, only when. Every business or service must know how to handle these negative reviews. Here are some hints:

The best defense is a great offense

You don't have to address negative reviews if you never have them in the first place. Proactively identify possible negative experiences and encourage customers to respond directly to you to resolve their issues. Here are some suggestions:

FIRST fix the problem

When you get a negative review, try to identify the customer and contact them directly. Then work with them to solve their problem. If a solution is not possible, be willing to cancel their service or refund their money. A disgruntled customer that hasn't been hurt financially quickly becomes a toothless monster. Once this is done, try to have the customer remove their review if they are satisfied. OR even better, try to get them to rave about how you solved their problem!

Know your dissatisfied reviewer

Conduct research on the customer. Are they habitual complainers or bullies? The current public feedback forums have created many of these types. On the other hand, people easily get frustrated with poor service and are simply at their witís end. It's important to know the difference.

Problems are opportunities

Inside every negative review is an opportunity to be better at what you do. Even with the review bullies, there is an element of truth to most reviews. Try to get past the emotional impact of the negative review and think of it as a gift to make your service better than everyone elseís.

Writing the response: FREE advertising

Youíve fixed the problem. Youíve researched the customer. Youíve looked for opportunities to be better at what you do. Now you are ready to publicly respond to the negative review. But ó and this is important ó you are not responding to the complainer. You are responding to future readers of the complaint! The formula of a great response is:

Time is of the essence

Try to complete your contact and response within 24 hours. This speed will impress all future readers. A lot must be done to reach this goal, but if you assign someone to monitor review services for you, and they are empowered to solve problems, you can accomplish this goal.

Todayís review systems give entirely too much power to a few complainers. Your goal should be to use these systems to your advantage to build your brand and find new buyers.


As always, should you have any questions or concerns regarding your tax situation please feel free to call.

This publication provides summary information regarding the subject matter at time of publishing. Please call with any questions on how this information may impact your situation. This material may not be published, rewritten or redistributed without permission, except as noted here. This publication includes, or may include, links to third party internet web sites controlled and maintained by others. When accessing these links the user leaves this newsletter. These links are included solely for the convenience of users and their presence does not constitute any endorsement of the Websites linked or referred to nor does TIMOTHY W TUTTLE & ASSOCIATES have any control over, or responsibility for, the content of any such Websites. All rights reserved.

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The information contained in this newsletter is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance. For more information on anything in ONLINE ADVISOR, or for assistance with any of your tax, business, or financial strategy concerns, contact our office.

Timothy W. Tuttle & Associates