The 5 Things That Really Matter When It Comes to Investing

January 23, 2014

One of the most common questions I get asked is how to divide your money between different types of investments. You’ve probably heard that 90% of investment returns can be explained by your asset allocation or how you divide your money between stocks, bonds, and cash.  The problem is that asset allocation guidelines can vary dramatically based on where you look. So how do you decide? Continue reading “The 5 Things That Really Matter When It Comes to Investing”

Do You Qualify for Free File?

January 21, 2014

It’s that time of year again. The IRS will begin accepting electronically filed federal returns on January 31st, kicking off the 2013 tax filing season. But instead of paying hundreds of dollars to have  your taxes professionally prepared, you may be eligible for free tax preparation and e-filing through the IRS Free File program, a public-private partnership between the IRS and commercial tax software companies. Continue reading “Do You Qualify for Free File?”

How to Avoid a 50% Mistake

December 18, 2013

Every year, the Ward family gathers around the table to share a traditional Thanksgiving meal together.  Each of us takes turns sharing what we are thankful for and before long, the whole dining room is alive with laughter and joyous conversation.  After the kids are excused, the adults sit closer together to talk about more serious issues, and inevitably the subject of money enters the discourse.  Fortunately, there is a financial planner among them, so everyone knows who to ask when financial questions arise. Continue reading “How to Avoid a 50% Mistake”

A Tax Tip for a Jolly Old Elf

December 11, 2013

‘Tis the season to be jolly, and what better way to express your jolliness than to share it with others. Friends and family may be the first on your list, but don’t forget the less fortunate. My friend and colleague, Diane, and her daughter are starting a new tradition this year: They have adopted a family for the holidays so Diane and her daughter have chosen to sacrifice part of their Christmas so that others can enjoy theirs. Continue reading “A Tax Tip for a Jolly Old Elf”

In Defense of the 401(k)

December 04, 2013

I began my career in 1994 as an enroller for a large 401(k) provider.  From the moment I started, I was indoctrinated in the virtues of this particular savings vehicle. Things like “tax-deductible savings” and “payroll deduction” became everyday vernacular, and before you knew it, I was out there evangelizing the masses on the greatness of this extremely important part of the tax code.  So imagine my chagrin when I learned that my beloved 401(k) has come under attack recently by some who are calling for its demise. Continue reading “In Defense of the 401(k)”

Clothes Too Tight After Turkey Stuffing?

December 03, 2013

Did you try to put that cute winter sweater on for the first time this year, only to find that eating way too much turkey, mashed potatoes, and stuffing is resulting in your unsuccessful attempt to stuff yourself into clothes that are now too tight? Well, I don’t have a magical dieting solution, but I’m sure someone else might just find that sweater a perfect fit. Whether some of your clothes are now too tight, too loose (I wish!), or just simply out of style, the solution is to donate these items to someone who CAN wear them.  Not only can someone else make good use of your castoffs, you might even be able to take a tax deduction.  Continue reading “Clothes Too Tight After Turkey Stuffing?”

5 Financial Blessings to Be Thankful For Today

November 28, 2013

We may have evolved to focus on the bad things in life (our more cautious ancestors were more likely to survive and reproduce) but today is a time to give thanks for the good things that we too often take for granted. This applies to our financial life too. Here are 5 financial blessings we can be thankful for this Thanksgiving and some steps you can take to make the most of them: Continue reading “5 Financial Blessings to Be Thankful For Today”

What You May Want to Discuss Around the Thanksgiving Table

November 20, 2013

Thanksgiving is right around the corner, and if you are like most traditional American families, you’ll probably eat too much, watch a game or two on the TV, and simply enjoy spending some quality time with each other. For some families, spending quality time together happens regularly, but for many, including my own, it usually only happens around the holidays.  If that is the case for your family, one thing you may want to do this holiday season is discuss long-term financial goals. It may not seem like the most enjoyable topic of conversation around the dinner table, but with more and more uncertainty about the future, it may be one of the more important conversations you will ever have in your life. Continue reading “What You May Want to Discuss Around the Thanksgiving Table”

Can You “Burp” Away the Medicare Surtaxes?

November 19, 2013

Burping can relieve more than just stomach discomfort. It can actually relieve the pressure of the new 3.8% Medicare surtax, according to Steve Parrish, a Forbes contributor. His idea of “burping income” is that if a taxpayer can discharge some income at certain levels, it avoids an accelerated build-up of further taxes. This analogy can apply to various triggers in the tax code but is particularly appropriate to the Medicare surtax. Continue reading “Can You “Burp” Away the Medicare Surtaxes?”

Pass the PEP, Pease?

November 12, 2013

No, I am not asking you to pass me the pepper. PEP stands for personal exemption phaseout, a potential reduction or even elimination of the $3,900 per person exemption on your 2013 tax return. For single filers with adjusted gross income (AGI) in excess of $250,000 or couples who are married filing jointly and have AGI in excess of $300,000 the exemption will be reduced by 2% for every $2,500 of AGI (or portion thereof) above $250,000 ($300,000 for married couples filing jointly). For married couples, personal exemptions will be fully phased out once their AGI exceeds $422,500, or for single filers if AGI exceeds $372,500 according to Internal Revenue Bulletin 2013-5. Continue reading “Pass the PEP, Pease?”

A Dream Wedding or Tax Nightmare?

October 11, 2013

I recently had the opportunity to speak with a wonderful young lady who considered herself very lucky to have won a “Dream Wedding” from a bridal magazine contest. Having a daughter in college, it sometimes crosses my mind that I’ve seen her go from preschool through entering college and her next milestones could be getting her first job in the “real world,” getting married (hopefully not any time soon!) and becoming a mother (hopefully VERY far down the road….). So when talking with this “bride to be” and hearing that she won a $100,000 dream wedding, I was incredibly happy for her.  Continue reading “A Dream Wedding or Tax Nightmare?”

Yes, I’m A Finance Geek

October 08, 2013

I’ve just returned from a girl’s weekend vacation with a group of 5 friends who I have known for ages, a few going back as far as elementary school.  Now we share pictures of grandkids who are about the same age as when some of us first met. Since I’m the number cruncher, I got the task of tallying up the tip and dividing the bill when we went out for a meal, and when the conversation turned to buying new homes or college costs, I was always asked to weigh in with my “professional opinion.”  Continue reading “Yes, I’m A Finance Geek”

How Much Will You Really Get From Social Security?

September 23, 2013

Will Social Security be around when we need it the most…and if so when should we take it and how will it be taxed? These days, those are some of the biggest retirement planning concerns among anyone that’s not currently retired. It’s no secret that Social Security is in need of some significant changes to strengthen the ability of future generations to receive Social Security benefits. The reality is that without any changes to the system only 75-80% of projected benefits would be able to be paid.  Continue reading “How Much Will You Really Get From Social Security?”

Could Asset Location Make Your Investments More Tax Efficient?

September 20, 2013

What happens when you get a group together that consists of financial planners, CPAs, estate planning attorneys and investment managers? Usually when that happens for me, it means that a bunch of my friends are getting together to go watch one of our friend’s bands play or we’re playing poker. And, it also means that the topic is eventually going to become a financial one and inevitably there will be people on opposite sides of an issue so debate is a certainty.  The great thing about the debate is no matter what side you’re on, you learn something you didn’t know before the debate. One of our recent debates was about asset location.  Continue reading “Could Asset Location Make Your Investments More Tax Efficient?”

Let Open Enrollment Help You Minimize Taxes

September 13, 2013

With tax rates where they are today, and potentially going higher in the future due to the ever-increasing national debt and Congressional spending habits, I get asked a lot of questions about how to minimize taxes. That’s always an interesting conversation because taxation comes in many forms (taxes on income, capital gains, and interest, not to mention all of the consumption taxes we pay) and across many timelines. Are we looking at ways to minimize this year’s tax bite or our lifetime tax bite? Sometimes there are tradeoffs.  Continue reading “Let Open Enrollment Help You Minimize Taxes”

Getting Help From an Unlikely Source

September 04, 2013

When was the last time you looked forward to dealing with the IRS? Most of us only interact with the IRS when it’s time to file our income taxes or respond to a filing inquiry (i.e. an audit). We probably all know someone who has had challenges with the IRS, and hopefully we never fall into that category, but believe it or not, there are several helpful tools and resources this often belittled agency makes available to taxpayers to help them manage their taxes better. Here is an overview of what I consider some of the more useful resources that may be just a click or phone call away: Continue reading “Getting Help From an Unlikely Source”

Do You Know the Difference Between an HSA and an FSA?

September 03, 2013

Fall has arrived, and that means open enrollment is just right around the corner. For many employees, this provides the window of opportunity to sign up for either an HSA or FSA in order to set aside pre-tax dollars for your out-of-pocket healthcare costs.  Not quite sure what the difference is between these 2 types of accounts? Well, you are not alone.  In a recent Fidelity survey, two-thirds of those surveyed said they simply do not understand how an HSA works and “a full 73 percent of respondents said an HSA is pretty much the same thing as a health FSA or were unsure, and the ‘use it or lose it’ provision of FSAs was one of the most commonly misunderstood differences between the account types.” Continue reading “Do You Know the Difference Between an HSA and an FSA?”

Which States Are Really Tax-Friendly?

August 30, 2013

One of the more interesting conversations I get to have with people who are close to retirement is about where they plan to live. Often, inertia (or a paid off mortgage) leads people to stay exactly where they are today. People are often attached to their homes and moving is rarely if ever a smooth and easy process.  Continue reading “Which States Are Really Tax-Friendly?”

How to Get Around Roth IRA Income Limits

July 25, 2013

Updated February, 2018

A while ago, I wrote about some reasons to consider contributing to a Roth IRA. But if you earn too much to contribute to one, these arguments may seem like a moot point. However, there are a few things to keep in mind before completely writing off the Roth IRA. Continue reading “How to Get Around Roth IRA Income Limits”