A Powerful Example of Tax Planning For Des Moines Families And Individuals

A Powerful Example of Tax Planning For Des Moines Families And Individuals

It’s wild to think that there are only four more months in 2019.

As we get older, time sure does fly. And unfortunately, many get stuck in a rut from year to year. Specifically related to taxes — many do not look at, or even think about, their tax situation until the winter or early spring. But if you can take just one piece of advice from today:

Not only can you start planning your taxes in advance, it is by far the wisest thing you can do for an accurate, stress-free April (or at least less stress than usual).

And if planning ahead is the first item of importance, having someone to plan with is a close second. If you are planning your taxes alone, please give me a call so we can meet and discuss everything from strategy to accuracy when addressing your taxes.

Let’s examine a hypothetical situation, and the kind of strategy we could put in place together…

A Powerful Example of Tax Planning For Des Moines Families And Individuals

“Stop setting goals. Goals are pure fantasy unless you have a specific plan to achieve them.” -Stephen Covey

Pretend you were considering taking money out of a pension (401k) to finance a down payment on a house. This kind of strategy happens all the time. However, to complete the transaction without consulting a knowledgeable Des Moines professional beforehand might result in a four- (or five-) figure mistake.

In this specific situation, I would ask you a few simple, necessary questions. And then, depending on the answer, would likely advise you to roll the money ($10,000) into a Traditional IRA. That way, you could withdraw the money at a savings of $1,000. This is because money used for a first home, up to $10,000, is penalty-free when taken from an IRA but not a 401K.

That’s called strategy. When you benefit from that kind of strategy, it’s called tax planning. It’s not only related to housing, 401K or IRA allotment — I want to help you experience all-around financial success moving forward.

While we’re on the topic, here are other “penalty-free” retirement account withdrawal opportunities (Note: these are NOT “tax-free” — only penalty-free):

* Unreimbursed Medical Bills
* Total and/or Permanent Disability
* Health Insurance Premiums After 12 weeks of Unemployment
* Death
* Higher Education Costs
* Pending Senate Approval: Qualified Birth And Adoption Expenses

Also note that there are specific caveats to each of these options. We can discuss your best route when we talk about your individual situation. There are a few other obscure situations available, but again — these decisions are best made under consultation.

Although, when working with us, there’s no certified promise of saving money (because every situation is so nuanced and unique to each Des Moines client). But I can guarantee this: If you don’t speak with us in advance, we won’t have the chance to save you all we possibly could on your 2019 taxes.

Don’t wait until winter. Please don’t wait until spring. Let’s get some strategy started … right now.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

Two Ways Towards Making Money In Marriage Harmonious For Des Moines Couples

Two Ways Towards Making Money In Marriage Harmonious For Des Moines Couples

Summer is nearing an end. Which also means, well, wedding season is slowing down.

If you’ve been married, you know that there is a big difference between the “wedding show”, and the real work of being married. One of the best pieces of advice I’ve seen for newlyweds is that they put just as much planning (if not far more) into the marriage, as they do the wedding.

It’s worth it, because the support gained from a good marriage far outlasts the rightful excitement of wedding days and honeymoons. And, putting on my green shades here, dual income is a HUGE bonus to getting married. Should it be one of the main reasons you get married? Of course not.

Is it okay to capitalize on its advantage and plan accordingly? Absolutely.

So let’s discuss two steps for the maturing process of managing your money in marriage. Because after the wedding, it really isn’t always easy to merge two financial lives.

Two Ways Towards Making Money In Marriage Harmonious For Des Moines Couples

“Money, like emotions, is something you must control to keep your life on the right track.” -Natasha Munson

Whether you’ve been married for years, aren’t married but talk regularly with married couples, or have kids who will soon enter into matrimony, please think about these things and how they could help.

Way #1: Your Money Story

A great exercise for Des Moines married couples is to write separate autobiographies on the relationship between you and the money you have acquired over the years. No matter how you’ve both earned money, there is a meaningful story behind each record.

This could be in paragraph form (no novels please) or just a bulleted list with some additional info. Regardless of how you write your “Money Story”, ask yourself a few key questions in the process:

  • What fears do you have about money?
  • Who helped you learn about money?
  • How do you envision two incomes (or one income) affecting marriage?
  • Other than the obvious needs (pay rent, etc.), why is money important to your marriage?

Are there other important questions to keep in mind while writing your “Money Story”? Yes, but here are a few to get started. Now go tell your spouse about this week’s new money exercise — and get writing!

Way #2: Dream Scenario

Think about this for a moment:

“Imagine you are fully financially secure, that you have enough money to take care of your needs now and in the future. How would you live your life?”

That first sentence sounds like a bad intro to some sort of pyramid scheme, but true and honest financial independence is closer than you think! And if you’ve already gotten off to a great start, help others with this frame of mind.

With pen (still) in hand, complete another exercise: write down your “dream scenario” in regard to money in marriage. And use your imagination. Don’t hold back. Do you two want to own a lake house someday? Start a business? Travel the world? Have kids? Start a charity?

All of those decisions in marriage are huge financial commitments, but if you don’t write down your goals, you are less likely to pursue and complete them. That’s a fact.

Both of these simple-yet-effective exercises will create some great conversations in marriage — regardless if you’re engaged, newlyweds, or married for years. You just can’t communicate enough about money in marriage. Don’t view it as greediness; view it as marital readiness for whatever the future throws your way.

I am always a call away if you’d like to discuss ways to aid your marital financial situation.

Although “here comes the bride” is a beautiful occasion in life, it’s inevitably followed with “here comes the bills”.

And cake of course.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

Four Online Security Moves For Des Moines People Right Now

Four Online Security Moves For Des Moines People Right Now

Firstly, our hearts are broken for the victims of the shooting at the Garlic Festival in California on Monday (one of whom was a six-year-old boy). These events accumulate to paint a picture of deep pain buried within our modern culture, and it’s important, in my opinion, that we never go numb to them.

+++

There’s no good way to move on from such a topic, but it is the nature of these things that we must, and so we do.

I had queued up the topic of online security for this week, and somehow it does seem pertinent.

Intrusions can feel like such a violation, and while there is no substantive comparison between personal and online security, the sense of violation is present in both.

It’s the sort of thing that is so easy to let slide, and allow your computer usage to proceed along in negative habits simply from inertia.

Well, let’s fix that, shall we? With so many of our sensitive financial, tax, and personal details now to be found (and stolen) online, we must see online security the same as locking the door of your car when you leave it in a public parking lot.

So, here are four things you can do right away.

Four Online Security Moves For Des Moines People Right Now

“Passwords are like underwear. Don’t leave them out where people can see them, change them regularly, and don’t loan ’em out.” -Chris Pirillo

Recently, Equifax FINALLY reached a $700 million deal as a result of their data breach in 2017. But even with the publicity of that breach, it’s alarming how many Americans still neglect steps toward cyber safety: changing passwords, backing up information and stopping “share location” features on mobile apps.

Let’s look at four other ways you can protect your personal, tax, and financial data this year.

1. Install Antivirus Software

One of the easiest steps you can take TODAY is downloading antivirus software on your computer. Antivirus software will scan your computer for malicious software (aka “malware”). Think of antivirus like the CIA for your computer — it will track down suspicious and potentially illegal activity on your computer.

To help, here is a list of the top-rated antivirus programs.

For Mac users:

For PC users:

Purchasing antivirus security is an investment in your tax and personal safety.

2. Firewall Installation

The definition of firewall: “a part of a computer system or network that is designed to block unauthorized access while permitting outward communication.”

If antivirus acts as the CIA for your computer, view firewall as a team of bodyguards who won’t let imposters access your data.

Your computer’s operating system might include firewall software. But you can take extra precaution with additional firewall protection. Check out a few options from Lifewire’s updated list of firewall security programs.

3. Back Up Your Data

Store important tax information on an external hard drive.

If you don’t take active steps like installing antivirus software or firewall protection, your information might be compromised. Unfortunately, we now live in an internet age where that happens every day.

But if you “insure” your data, you will be less devastated one day when/if a breach happens.

And we all realize that sometimes computers crash — an unfortunate reality that happens far too often. Store your personal tax info in folders that you can store on an external hard drive, then bring the hard drive to our meetings throughout the year. View your hard drive as a virtual, mobile “file cabinet” for all your important tax files.

Another option: purchase Dropbox Plus (or Professional), and change out your main document folders and shortcuts to use the ones that are synced with Dropbox. That way, ANY file you save will automatically be backed up to your Dropbox account.

Just keep that Dropbox password secure. 🙂

4. Take Password Precautions

Use complex passwords! It seems like a pain, but once you have a program like LastPass or 1Password in place, it becomes much more doable.

And don’t use the same password for all of your online accounts!

All of this really should be seen as common sense precaution.

Although you can download antivirus, set up firewalls, AND back up your info, know that nothing is 100% foolproof. We’re dealing with two realities here:

  1. Most Des Moines people live on the internet in some form or fashion, and a lot of their personal info is stored somewhere online.
  2. Hackers and scammers have gotten really good at using the internet to steal personal information.

So if you have yet to do so, make today the day you protect tax and personal information.

No one wants another Equifax situation (or worse) on their hands. But if it does, I want you to be in the clear. Please reach out if you would like to discuss more about keeping your information safe.

 

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

Four Great Summer Tax Moves For Folks in Des Moines

Four Great Summer Tax Moves For Folks in Des Moines

Summer is flying by. Do you feel that way?

It’s an exciting season with cookouts, vacations and extracurricular activities (my thoughts and sympathies for Des Moines parents with multiple kids playing multiple sports among 100 other things). Before you know it and July is almost over. How does it all go by so fast?

But if you can find some time amidst the craziness, please consider these four tax moves for lowering your 2019 tax bill.

If some (or all) of these are unfamiliar to you, please reach out – we can tackle them together.These aren’t difficult items but do take some intentionality. Let’s meet before summer’s end and chip away at your tax bill.

(515) 259-7779

(or shoot me an email through the link at the top of the page)

Now, on with some advice . . .

Four Great Summer Tax Moves For Folks in Des Moines

“We keep moving forward, opening new doors, and doing new things, because we’re curious and curiosity keeps leading us down new paths.” -Walt Disney

Let’s dive right in, since it really is hot out there…

Bunches & Bunches

If you’re not familiar with a bunching strategy, it helps you meet itemized deduction thresholds. Essentially, you bring in as many allowable expenses as you can into a taxable year.

If you itemize, we’ll want to pay careful attention to your medical expenses. In 2019, medical expenses must exceed 10 percent of AGI – a change brought about by the Tax Cuts and Jobs Act (TCJA).

Making an additional mortgage payment or two before year’s end can also be claimed as an itemized deduction. And, of course, your donations to IRS-approved charities are deductible.

Side: Speaking of donations, this is a great time to take some clutter (clothes, keyboards, etc.) out of those closets and donate to those Des Moines charities!

Home Loans

This is one where it would be especially helpful to have someone like me walk you through it. Why? Because the TCJA strikes again.

The new law limits tax-deduction value of home equity loans. Therefore, interest is only claimed on Schedule A where the money borrowed is used to improve the home. If that’s confusing to you, I get it. Give me a call and we can go over it in-depth.

Re-Focus on Retirement Funds

Did you know, in 2019, inflation makes it so you’re able to add more to your workplace 401(k) and other retirement funds like a Roth IRA?

On that note, you might want to convert your IRA to a Roth since ordinary tax rates are lower than they have been in many years. But let’s chat before you do that . . . As of the TCJA, you cannot undo Roth conversions.

Adjust Withholding

I know . . . we’ve talked about this before. But it really is so important.

Whether you received a bigger refund this year or had to pay up, it’s important to make sure your withholding is accurate. Feel free to use this IRS Withholding Calculator or just reach out to me and we can sit down together and figure it out.

For many, summer means all those good things I mentioned earlier. And they are good.

But I can’t help but get excited thinking about a jump start on next year’s taxes. Especially if it means helping you lower your tax bill.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

Ann Hartz’s Parents’ Guide For Telling Their Family’s Financial Story

Ann Hartz’s Parents’ Guide For Telling Their Family’s Financial Story

How we are raised around financial matters can impact us for a lifetime.

When a close friend or family member loses their home, or their job (or both), it can be frightening on several levels. You begin to wonder if the same could happen to you. And, as you’re probably aware, this fear of economic uncertainty causes anxiety in many children, too.

While it is impossible to shield kids from all that goes on around them, I happen to believe money worries are one of those things we shouldn’t share with kids. There are a number of ways to do that — some very specific, and some more subtle.

I’ll begin with this: When it comes to transferring anxiety over money to your children, there is no faster way than to fight over it with your partner. Asking Des Moines couples not to argue over money at all is a little unrealistic, so when differences arise, at least try to do it in private and out of earshot of your kids.

Spenders and savers are bound to clash, but when they fight in front of kids they give kids something to worry about beyond Mom and Dad fighting. Will we run out of money? Is Dad losing his job? Will we have to move? Will we have money for food?

Even if parents are unsure about the answers themselves, they owe it to their kids to exude confidence when it comes to money. If things really do get bad, emphasize that no matter what, you’ll all be together and that home is where you make it — wherever that may be.

You see, as quickly as children seem to “grow up” in this digitally-connected world, they still really are in need of being brought into the wider world with care.

And I have more thoughts…

Ann Hartz’s Parents’ Guide For Telling Their Family’s Financial Story

“A map is the greatest of all epic poems. Its lines and colors show the realization of great dreams.” -Gilbert H. Grosvenor

When kids ask to buy things, and money is tight, try to rationalize with them instead of simply saying, “we can’t afford it.” Tell kids that instead of spending money on toys this week, you need to focus on buying some basic things like food and gasoline for the car. Ask them to come along to the grocery store to help pick out a few favorites. If you simply say you can’t afford something, kids will begin to wonder what else you can’t afford, and that’s a psychological slippery slope for young minds.

In fact, I’d go so far as to say this: Don’t allow anyone in your house to use the word “poor” when describing your economic situation — even when times are pretty lean in the household. Families might be broke– but that doesn’t mean they’re poor! It’s more than semantics. The word “poor” seems to connote inferiority, or having some unfortunate circumstance. We don’t have to accept that paradigm. Sometimes, families simply spend more money than they earned and have to live on far less to turn things around. They may have been foolish, but they don’t have to be poor!

Now, let’s shift away from things not to do around kids, and focus on some positive things to teach kids to help them with their own financial futures.

Don’t Be Afraid To Teach

When I was growing up, money was taboo. Many Des Moines parents would no more talk about money with their children than they would their love life. While this is still true to an extent, I think most of us have recognized that kids need to eventually become more aware about the potential financial pitfalls out there than we were in my generation.

Start giving kids an allowance to budget their savings, spending and giving. Help them open a savings account and begin to teach the mechanics of a bank account — completing deposit slips, balancing their accounts and explaining how compound interest works. As kids get older, introduce them to increasingly more complicated topics like investing, borrowing money, insurance, etc. By the time they are teenagers they should have a good grasp on Personal Finance 101 topics to better prepare them for life.

Save More; Spend Less — For Kids

As adults, we know it is prudent to put back a sizable emergency fund of several months (I actually recommend a full year) of basic, household expenses. Because kids are not responsible for everyday expenses, it can be hard to get this message across to them. Instead of focusing on saving money for emergencies, teach kids to save money for opportunities.

Raising Young Entrepreneurs

My parents and grandparents were probably a lot like yours — they worked 40-50 hours a week, punched a clock and recharged over the weekends. After doing this for several decades they were given a cheap retirement gift, maybe a small pension, and a retirement send-off.

Well, times have changed.

The global economy, and the hyper-connected marketplace have underscored the importance of developing an entrepreneurial streak at a young age. Chances are very slim that your child will graduate college, pick one job and stay there for 40 years. More likely, there will be many jobs with many employers, and many periods of being “between jobs” in their lifetime. Wouldn’t it be great if they developed a “side hustle” to get them through those periods of unemployment, or to supplement their full-time income all along?

Perhaps you enjoy building things and have turned your one-time hobby into a side hustle building decks and fences on the weekends. Get your kids involved in the process as they grow older, and perhaps you can pass along a valuable trade. Even if they become accountants or fire fighters, having the knowledge and experience of a trade to fall back on could be incredibly valuable to them over a lifetime.

The point is not to stifle your kids’ ideas by forcing them into some ideal career path you have selected for them. Allow them to cultivate their own ideas. Over the next few decades, personal branding, and the branding of individual ideas will likely be hotter than any particular industry. Think about it — an iPhone app may be the next lemonade stand.

In a way, social media, and other new media, have greatly expanded the opportunities for kids to create new products, explore new ideas and push new content into the mainstream. There’s never been a better time to have an entrepreneurial mindset, and fostering that in your children at an early age is invaluable.

And for all of it, we’ll be in your corner, cheering you on.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

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