3 Under-Rated Retirement Accounts

September 03, 2015

One of the most common questions we get is how to prioritize funding different types of retirement accounts.In an ideal world, we would max them all out but most of us need to figure out which ones should take priority. I recently read this article that attempts to answer that question. While I generally agree with the points, there are three things that this article and many similar articles I’ve read tend to underestimate: Continue reading “3 Under-Rated Retirement Accounts”

When Does A Roth IRA Or 401(k) Work Best?

August 03, 2015

As a financial planner, I find people are pretty predictable about their feelings on income taxes: hardly any of them want to pay more than is absolutely necessary, and they feel like other people don’t pay enough! The US tax code has incentives and rules meant to encourage us to do specific things like buy a home, make charitable gifts and save for retirement. But is there any value in actually paying taxes up front rather than put them off if you can? Continue reading “When Does A Roth IRA Or 401(k) Work Best?”

How My Tax Preparation Software Let Me Down

July 22, 2015

For the last seven years, I have used tax preparation software to help me file my federal and state income tax returns, and I’ve never had a problem…until now. You see, each year I’ve been entitled to tax refunds, and each year when the tax preparation software asks me if I want to have my tax refund directly deposited into my bank account, I would say yes, but this year was different. This year, instead of getting a tax refund from the state, I ended up owing the state more money, so instead of asking me if I wanted my tax refund directly deposited into my bank account the software asked me if I wanted to have my tax payment debited from my account.  Continue reading “How My Tax Preparation Software Let Me Down”

Should You Buy or Rent a Home?

June 11, 2015

Summer is often a popular time for people to buy a home. In fact, I was recently talking to an employee who wanted to buy a place but she noted that the mortgage payment would be more than the rent for similar priced homes in the area she was looking at. However, after looking at the tax breaks and possible home appreciation, we discovered that owning would actually be cheaper for her. Continue reading “Should You Buy or Rent a Home?”

How New Online Tools Will Save One Woman Tens of Thousands of Dollars Per Year

April 30, 2015

Last week, I wrote about my three favorite online investment services. This week, I’ll show you an example of how a couple of those tools saved a friend’s mother tens of thousands of dollars. When I spoke to my friend, his mother had just retired with a $1 million portfolio and he wanted to know how she should invest it for retirement. Since we can’t provide specific investment advice at Financial Finesse, this was a rare opportunity for me to be more hands-on. Here’s what we did: Continue reading “How New Online Tools Will Save One Woman Tens of Thousands of Dollars Per Year”

You Have Less Than a Week to Make These Tax Saving Moves

April 09, 2015

Have you filed your taxes yet? April 15th is largely known as tax day, the deadline for filing and paying our taxes for the previous year. But it’s also the deadline to make 2014 contributions to three types of accounts that can reduce your taxes now, later, or both: Continue reading “You Have Less Than a Week to Make These Tax Saving Moves”

In Defense of Tax Refunds

April 03, 2015

My friend Sana is awesome. She has the ability to point out a view that I may not have considered before and makes me take a step back a minute and consider other angles.  Maybe this blog post can do for others what she has done for me at times.  
 Continue reading “In Defense of Tax Refunds”

Stop Going Through the Motions of Filing a Tax Return

March 30, 2015

Spring is a busy time of year here at Financial Finesse. While we are always busy providing financial guidance with passion and objectivity, the tax season and the April 15th deadline provide an extra sense of urgency for many callers reaching out to us on the Financial Helpline. Many of the income tax specific calls we receive can be characterized as information seeking and tend to be reactive discussions. When you think about the tax filing burdens created by a complicated tax code, the IRS can strike fear into hard working taxpayers to try and get things right. Continue reading “Stop Going Through the Motions of Filing a Tax Return”

Is Paying Off Your Mortgage Worth Losing The Tax Deduction?

March 12, 2015
Updated June 14, 2017

I recently received a question after one of my workshops from a woman who was wondering if she made a mistake paying her mortgage off early because she no longer has the mortgage interest deduction. I can’t tell you how many times I’ve gotten different versions of that same question (including after a later workshop session that same day). Here are several reasons why this is a classic case of letting the tax tail wag the dog: Continue reading “Is Paying Off Your Mortgage Worth Losing The Tax Deduction?”

Garbage In, Garbage Out: The Problem With Tax Preparation Software

February 18, 2015

A couple of weeks ago, I received a desperate email from Alex who was using tax preparation software to help him prepare his tax return. It seems he thought he could avoid taxation on his 401(k) from his prior employer by rolling it directly into a Roth IRA.  While it’s true he could directly roll funds from his 401(k) to a Roth IRA, it is NOT true that this will avoid taxation. Only after-tax money may be deposited into a Roth IRA, therefore the amount rolled over—a sum of nearly $20,000—would be treated as taxable income for the year. Continue reading “Garbage In, Garbage Out: The Problem With Tax Preparation Software”

Last Minute Tax Savings With An HSA

February 16, 2015

In recent weeks, millions of taxpayers have been realizing the true impact of the Affordable Care Act as they file their tax returns. It’s probably no surprise the individual mandate required most Americans to have health insurance coverage as of January 1, 2014. If you had employer-provided health insurance coverage for most of 2014 or you purchased coverage through a private exchange or directly from an insurance company, the health insurance mandate will not have an impact your taxes. Continue reading “Last Minute Tax Savings With An HSA”

When To Hire a Tax Preparer

February 11, 2015

It’s February, and that usually means that you are ready for winter to be over, you are thinking about what to get that special someone for Valentine’s Day, and you can’t decide whether to do your own taxes or to let someone do your taxes for you. For years, taxpayers have been baffled by the federal income tax system and for good reason. The number of pages in the Wolters Kluher CCH Standard Tax Reporter reached 73,954 in 2013!  However, there’s probably only a handful of those pages that actually apply to the average taxpayer, while the rest of those pages are technical jargon, legalese, and other stuff that’s most irrelevant to you and me.  Continue reading “When To Hire a Tax Preparer”

Obamacare Tax Forms Are Coming to a Mailbox Near You

February 09, 2015

I just got done pitching out a foot-high pile of holiday sale catalogs, magazines that I never got to read over the holidays, and donation requests from charities and schools that for some reason didn’t feel like I paid them enough tuition while there as a student. Am I the only one out there who’s looking online for a new smaller mailbox?  But just when we thought it’s safe to downsize our mailboxes, the Affordable Care Act (also known as the “ACA” and “Obamacare”) and IRS regulations have added more mail to the winter pile-up, the new series of IRS information forms that support whether you have health insurance that complies with the “Obamacare” rules.  These forms started showing up late this January and will every year after. Continue reading “Obamacare Tax Forms Are Coming to a Mailbox Near You”

My $280 Mistake

February 05, 2015

I admit it. I goofed. Despite being a financial planner who often helps people with their benefits, I made a mistake with my own. As I was looking at my expenses and taxes for last year, I realized that I could have reduced my taxes by $230. That’s the amount I would have saved if I contributed the $817 I spent on eligible vision and dental expenses last year to my company’s limited-purpose FSA (flexible spending account). Continue reading “My $280 Mistake”

How Should You Do Your Taxes?

January 29, 2015

I recently opened my mail and found my first tax documents for 2015. You know what that means…it’s the start of tax season! If you’re wondering if there’s an easier and/or cheaper way of accurately doing your taxes, here are some options: Continue reading “How Should You Do Your Taxes?”

5 Tips to Make Tax Time Less Taxing

January 12, 2015

If Christmas is the most wonderful time of year, why does it always have to be followed by its stressy and messy cousin “Tax Time.” Remember that New Year’s resolution to get your financial life in order? Well, it’s not too soon to start organizing the files, papers and “stuff” needed to do your taxes.   Continue reading “5 Tips to Make Tax Time Less Taxing”

My “NO” Year’s Resolutions!

December 31, 2014

This New Year’s Eve, millions of people across the country will make New Year’s resolutions about things they’d like to do in 2015.  I’m all in favor of this annual tradition but to mix things up a bit, I’m going to suggest a few things that you DON’T want to do in 2015—something I’m calling “No” Year’s resolutions: Continue reading “My “NO” Year’s Resolutions!”