Frank Kapitza & Associates

Frank Kapitza NJ CPA provides accounting, tax preparation and planning, and year round investment advice and estate planning services. We aim to be a one stop shop for your business and accounting services.

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America’s economic crisis: Investments in Real Estate

After the economy shifted toward a downward spiral when the housing market hit an all-time low in 2007 many people lost their homes, many lost their jobs and America found itself stuck with a massive economic crisis.  After years of recovery attempts, many people are hesitant about the market and question whether or not they should invest. Is now a good time to invest in real estate?

Well, let me start by explaining to you why we are in a financial crisis in the first place. Lenders began to offer sub-prime mortgages, which are issued to people who are of “high risk” because they are not qualified to own or maintain the payments of a home. Out of greed, lenders continued to invest in mortgage backed securities and issued these types of mortgages without keeping in mind that these people would soon, and almost inevitably default. Needless to say, they began defaulting on their mortgage loan payments and that’s where the trouble began. Borrowers took on more risk than they could handle and so did lenders. Companies like Fannie Mae and Freddie Mac were prominent players in adjusting mortgage lending standards. The establishment of these standards is one of the core reasons for the economic downfall of our country.

Security rating firm’s also started issuing mortgage backed securities with an AAA rating. This was significant because it allowed them to leverage them up to their capital. This was great at first and it made them a lot of money. Although, they were protected against high default rates, they could not keep up with the surprisingly skyrocketing rates…and so, these large banks began to FAIL. The government then bails out these banks and well, welcome to the American economic recession.

In times of misfortune, there are people who take advantage of circumstances and make a Fortune. A perfect example of this had been real estate here in America from 2007 to the present. The Housing market is slowly picking up according to some. But the reality is that it’s still a buyer’s market! After our country fell into a huge financial crisis, the value of homes significantly decreased. It is a great time to buy because home prices are still low, homes are still being foreclosed, which means that you can buy a home for less than it’s worth from banks or from homeowners who are selling their homes at a loss for one reason or another. In addition, since the housing market is showing signs of revival, it is therefore a good time to invest in a home because if the market goes up soon thereafter, you can sell for a profit and if it is your own personal home the profit of the sale can be tax free up to 250K if you are single and 500K if you are married- certain conditions have to be met, which we can explain to you in greater detail during the initial consultation whereby the first half hour is free.

 http://frankkapitza.com

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Avoiding NJ Inheritance Taxes is a problem you need to solve while the principles are still alive! Lack of proper estate planning can create a financial burden that robs families of their legacy.

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Why is accounting even important you ask?

Known as the language of business, accounting allows for better financially informed decision making both in businesses and personally. Accountants measure economic events and use the data to help other successful invest money, manage a business, or decide how exactly to spend a monthly paycheck.  

Find out more about how to run your business and life like a champ here.

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Lawmakers announce compromise budget deal

(Photo: NBC News)

GOP Rep. Paul Ryan and Democratic Sen. Patty Murray, the top lawmakers on budget issues in their chambers, detailed a limited framework that could eliminate the shutdown threat that has loomed for years.

Continue reading

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Why Investing in a college fund is an important decision for your children and your finances!

When you have children one of the primary concerns that any parent has, remains the mystery of the future and what it will mean for the well-being of their child and ultimately for their family as a whole. It is a parents dream to see their child become a success, get an education and graduate from college prepared to face the world. It is a parent’s honor to know that their once helpless baby is now a young adult ready to face the world, and college is their first step.

Although the idea of your child attending college and pursuing higher education is exciting, you must not forget that college is not free; on the contrary, it is increasingly expensive. College is draining on a family’s finances, especially if they have not planned for it properly or planned for it at all. That is why planning early on by investing in either stocks,  college funds or other investments is so crucial to the transition of a student into college for both the parent and the child. It does not put as much pressure on the pocket and does not add more stress to the already nervous upcoming “college freshman”.

There are various types of accounts that can help you save up for your child’s college education. Particularly because tuition costs are steadily growing as the years pass, it is essential to invest in funds that will grow over time. There are accounts in which you can invest on a monthly basis and theses deposits accumulate continuously until it is needed on a child’s first year of college. There are various types of accounts that can be used for college savings. For instance 529 college savings plan, educations savings accounts, or custodial accounts. There is more to college savings accounts than meets the eye. We can help you to adequately establish what type of account you want, how much you are capable of realistically investing in it on a monthly basis based on where you presently stand financially, how many accounts do you want to open, is the account tax deferred, or will it impact any financial aid that the child may be eligible for?

Additionally, this is a process that should begin early on in the life of a child so that money can continue to grow and potentially accumulate enough to cover at least some of the tuition and educational expenses that your child needs. This will prevent you from being stressed out, last minute, because you can’t fathom how you’re going to gather so much money up in such a short period of time. Investing your money into an account that will help your money grow largely overtime is crucial, your pockets will thank you when the day comes and so will your kids!

- See more at: http://frankkapitza.com

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If you get jealous while reading about CEO pay, don’t read this:

McDonald’s and Starbucks’ CEOs make over $9,200 an hour

(Yahoo Finance via Business Insider)

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How much will Americans spend on their Thanksgiving turkey? New Daily Ticker video and post: http://yhoo.it/1bsO902

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I have no use for bodyguards, but I have very specific use for two highly trained certified public accountants.

Elvis Presley

Wise words from the King.

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Have a laugh, but don't ignore an IRS tax dispute! Avoid NJ IRS tax disputes.

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At Frank Kapitza CPA, we offer Quickbooks training and consulting in the Northern NJ area. We are QuickBooks Advanced Certified Pro Trainers.

Need help with your Quickbooks? Let us know and we can help!

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After the economy shifted toward a downward spiral when the housing market hit an all-time low in 2007 many people lost their homes, many lost their jobs and