Conventional Financial Advice May Not Always Be Best by Ann Hartz

Conventional Financial Advice May Not Always Be Best by Ann Hartz

Just to give you a little snapshot of why it’s taking so long to get tax reform done (and I know — you’re surely waiting with bated breath), consider this: under certain circumstances with the proposed reform, some people would face a marginal tax rate of over 100%.

The WSJ did the analysis over the weekend, and it is correct by my reckoning.

Which, of course, is exactly the sort of thing I was referring to last week when I said that the prospect of diving into the new laws and finding savings is “appetizing” for someone like me. Because even if the law passes as currently formulated (and remember, nothing is yet passed), there are ways that those same people who might face 100+% tax rates could pay much LESS tax.

But only if they have a pro in their corner.

For instance, I’ll offer you this piece of advice: It looks pretty certain that you’re not going to be able to deduct your state and local income taxes in 2018. Both the House and Senate bills kill this deduction.

This means that if you can find a way to pay (or even overpay) your state and local income taxes NOW, before the end of 2017, you will be able to deduct them from this year’s taxes. But you almost certainly won’t be able to deduct them next year (even for tax payments that are “assigned” to previous years).

That’s just one example of not letting these things just “happen” to you.

Too many people in Des Moines opt for the status quo ante approach, which, when it comes to taxes, can often mean trusting a piece of software to spit out the right numbers and somehow magically find all the right deductions for their specific life in the real world. A piece of software won’t be able to tell you things like I just told you, and at the right time.

Or it can mean purchasing something that you “just have to have”, because that’s what you’ve always done or because that’s what you see “everyone” around you in Des Moines doing.

If 2017 has taught us anything, it should be that this is not the age in which conventional wisdom is always right.

So, here are some other pieces of conventional financial wisdom that may NOT be right for you.

Conventional Financial Advice May Not Always Be Best by Ann Hartz
“A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.” -Robert Frost

You can find lots of advice in Des Moines on handling your finances, but not all of it is valid for everyone. That’s why it’s always helpful to have someone who can speak into your specific situation. Because we shouldn’t just assume that the following “rules” are always true…

1) Always invest for the highest return. 
High returns frequently involve higher risks, as well as bigger fees. You may be better off seeking safer, more conservative investments, even if they don’t produce as much in the short run.

2) Homes are always good investments. 
You may think that renting is just throwing dollars down the drain, but remember that homes can be an expensive proposition, with high transaction costs, and constant maintenance expenses. You may save more money by renting until you can better afford a house of your own.

3) Avoid debt at all costs. 
Generally speaking, Dave Ramsey is usually right when it comes to financial principles. And you should certainly avoid overextending yourself. However, some debt can be useful when buying a house (when that’s appropriate — see above), or in certain business situations. Just be sure you can comfortably manage it, and pay it off on time, and with as little cost as possible.

4) Sell when your stock is high. 
What goes up must come down, right? But you want high-performing stocks in your portfolio at all times, so resist the urge to cash out just because a stock has reached an all-time high. Otherwise, in time, you could end up with a bundle of low-performing investments.

5) You can do everything yourself. 
You can trade your own stocks if you want, but you’ll often do better working with a good financial planner from Des Moines. And you can prepare your own taxes, but, well, as I think you probably understand, it’s better to work with someone who knows the system like the back of their hand.

We pay attention to this stuff so you don’t have to. And we’re in your corner.


Ann Hartz
(515) 707-0884

Ann M. Hartz, CPA

Hartz’s Four Good Reasons To Give Charitably, Aside From Tax Deductions

Hartz’s Four Good Reasons To Give Charitably, Aside From Tax Deductions

As I write this, the Senate has passed their version of the tax reform bill, and now we wait for the final version of the bill. The process isn’t yet finished (it needs to go through the “reconciliation” process, and the President needs to sign it), but we have some basic ideas about what’s to come for 2018.

I’ll do a deeper dive in subsequent weeks, but here’s the thing. Congress has four weeks to get this done.

To think that they will do this well, and NOT leave behind holes, “provisions” and other goodies for smart tax professionals (like me) to take advantage of … well, the prospect is almost appetizing. I’m looking forward to diving into it and passing along the savings to YOU.

Because there are always hidden savings.

And we’ll be on the case for you in 2018.

But here we are in 2017, operating under existing tax law, and there are still very good reasons to give charitably for tax reasons.

But I like to see Des Moines residents and taxpayers give charitably — whether or not they do so for the purposes of reducing their taxable income.

About which, I have some thoughts for you.

Hartz’s Four Good Reasons To Give Charitably, Aside From Tax Deductions
“My friends are my estate.” -Emily Dickinson

When we advise about or help set up tax-saving mechanisms for Des Moines clients to deliver their philanthropy and giving (outside of normal tax deductions), there’s plenty of discussion about the benefits of the gift for the recipient.

But what about for the giver? Here are some things to consider, as you contemplate giving, during this month of year-end appeals …

1. When you give, your emotions change.
Studies show ( that when individuals spend money on gifts for friends or charitable organizations, their happiness increases — while those who spend on themselves get no such boost. Even Scrooge can agree that everyone wins.

2. You might just spend it on something dumb, anyway.
As pious as you are, there’s still extra money in your budget somewhere. Create a budget for charity donations, then take some of your extra money (each month or each year) and donate it to charity. Use your spending money to make a difference instead of spending it on Brookstone junk you’ll use once. And if you think you don’t have enough, take that extra 2% you’ll be earning next year and put that toward a charity fund. For someone making $100,000, that’s $2,000.00.

3. It’s probably now or never.
Don’t pretend that instead of giving money, you’re going to donate time. When was the last time you volunteered at a soup kitchen? Don’t let your mind fall for this trick. Send the money now or you’ll end up giving nothing.

4. Get ahead of your heart.
This is the biggie, in my opinion. There’s something that occurs in your psyche when you cut a big (or relatively big) check to someone in need, or to a charity organization. You feel more powerful–more dynamic. You signal to your own soul: “Money doesn’t rule me. I have more than enough, so much more than enough that I’m giving it away.”

Then, of course, something special sometimes actually happens: more money seems to find itself in your hands.

I’m not advocating a mystical pay-it-forward scheme; I’m simply making this observation over years of being a student of how money “works”. Frankly, it just seems to regularly find itself in the hands of those who give it away.

So, aside from the tax benefits … consider these as well. And I hope we talk soon …


Ann Hartz
(515) 707-0884

Ann M. Hartz, CPA

Get Lower Taxes: 4 Last-Minute Tax Moves For Des Moines Taxpayers

Get Lower Taxes: 4 Last-Minute Tax Moves For Des Moines Taxpayers

The first round of holiday festivities are behind us, and the nation turns its eyes to Washington DC to see if this December will be festive or glum.

Well … perhaps that’s an exaggeration. Most of us don’t take our cues from DC! Either way, this season marking the end of 2017 will be particularly bright — but I will say that we tax professionals are watching the Congressional proceedings closely to see what kind of “tax reform” we end up with.

From CNN:

“With little more than four weeks — and just 12 scheduled legislative days left — and the 2018 midterm elections looming, Republicans must not only pass their contentious tax overhaul and avert a government shutdown, but also reauthorize other federal programs that are fraught with politics.”

Here at Ann M. Hartz, CPA, we pay attention to this stuff so you don’t have to. And when (if) something gets actually passed, we’ll be right here to help you weed through what it might mean for you, your family, and your taxes.

Because in all of our years of doing this in Des Moines, we’ve seen plenty of tax reform bills churn through the Congressional sausage machine … and we have yet to see any of them make things “simpler” for the Des Moines taxpayer, or the system.

But who knows? Perhaps this one will be different from the many others. But I wouldn’t count on it.

Either way, we’re in your corner.

With one month left, however, the window is rapidly closing on making substantive changes to how YOU will be taxed in 2017.

But that doesn’t mean you’re helpless. Here are some last-minute ideas anyone can pull off.

Get Lower Taxes: 4 Last-Minute Tax Moves For Des Moines Taxpayers
“Things are never quite as scary when you’ve got a best friend.” -Bill Watterson

Regardless of what happens with this bill, there are no legislative changes that can affect what happens to your taxes for 2017. It would be a PR disaster for Congress to make a bunch of changes that would immediately shift how you should have been handling your finances for the entire year.

Not that Congress has shown itself to be extremely responsive to what the public thinks, or people in Des Moines, of course.

So, that aside, and barring some kind of massive event, here are some things you can do right now to lower your taxes, no matter what comes:

1) (Until December 15, 2017) Handle your ACA enrollment requirements.
Yes, as of this writing, it’s still the law, and the IRS says that until and if it’s repealed and replaced, they will be enforcing the “minimal essential coverage” reporting rule. Which means that your tax return won’t be accepted if you don’t have the right coverage in place. So get that handled, because you’ll pay stiff penalties otherwise.

And speaking of healthcare…

2) Spend Down Your FSA Funds.
Money set aside in a flexible spending account must be spent by the end of the year, else the funds are lost. Some Des Moines employers allow a two-and-a-half month grace period. So check with your employer to see what your personal deadline is for utilizing your FSA savings.

3) Consider “Bunching” Your Expenses.
This really only makes sense if you itemize your deductions. “Bunching” is a tax planning strategy that lets you shift deductible expense into the tax year where they’ll be more valuable. Moves range from scheduling medical treatments to simply renewing a work-related subscription or membership if those costs will be worth more in 2017 than they would be under a 2018 tax bill environment.

If, however, you find they won’t do you any tax good — and the medical procedure isn’t time critical — you can push them into the coming 2018 tax year. It’s much easier to make these choices now, and start collecting the receipts, with an entire month left, than to scramble at the end of the month when things are much more hectic.

4) Consider Making the Switch to a Roth IRA.
Roth conversions are taxed in the year the conversion happens. However, Des Moines taxpayers have the option to undo part or all of that conversion by their filing deadline (i.e., by April 2018). But in order to retroactively undo part of their conversion next year, they first have to convert this year. So if you are on the fence about converting, consider taking the plunge before the end of the year, knowing that you (and/or WE) can re-characterize some or all of the amounts early next year.

Now, there are plenty of other last-minute moves you could make, to affect your tax bill for this year. But these are the quickest, and the easiest (aside, perhaps, from the Roth conversion — but even that can be done quickly).

Do you have others you want to explore? Give us a call ((515) 707-0884) or shoot me an email (, and we’ll help you out.


Ann Hartz
(515) 707-0884

Ann M. Hartz, CPA

2017’s Been Hard For Our Nation, Can We Still Give Thanks in Des Moines?

2017’s Been Hard For Our Nation, Can We Still Give Thanks in Des Moines?

Here we are, suddenly finding ourselves in the week that we have set aside as a nation for the giving of thanks.

2017 seems to have been a difficult year for many to find glimpses of the light, to find goodness in the midst of seeming chaos and lots of bad news.

But, as I like to do, I’ll remind you that we’ve been here before, and worse.

In fact, this holiday was set into our federal law books during the midst of our nation’s most brutal conflict, by President Abraham Lincoln in 1863. (Here’s a link to his proclamation which is worth reading annually.)

We seem to find ourselves in the middle of culture wars, tax policy wars, political wars, and lest we forget, great tragedies like those that recently occurred in Texas, Las Vegas and elsewhere.

So … can we yet give thanks?

I say YES. Because we must, and because to do so is what sets us apart from our baser selves, and gives us that for which each of us is working and fighting: contentedness and peace.

You should sit in my Des Moines office with me sometime, watch the procession of “wealthy” and “poor” clients — families with 7-8 figures in the *bank*, and those going underwater. You would see what I get reminded of regularly: Sometimes my “wealthiest” Des Moines clients can be the most impoverished … and those without many zeros in their accounts can be flat-out rich.

Because being “rich” truly is a state-of-mind — and it’s tied to gratitude. It affects how you see savings, retirement, the current and future economy, career growth or investment. And, of course, gratitude is the enemy of fear. It’s like an opposite magnet for it — walk in gratitude, and fear seems to melt away.

So, here’s my advice for this week: Whatever financial (or otherwise) situation you happen to be in, find a way to be thankful. There are hidden blessings in any trial … and hidden fears lying within any windfall or revenue surge. Find and savor the blessings, and watch your family, your co-workers and your domain thrive.

As I gather at my table with family and friends this week … I am thankful for you — and people like you. Thank you for your trust, for your business year after year … and for making my first step into starting and running a firm “way back when” so rewarding now.

No matter what Congress throws at us in these next few weeks in terms of tax law changes (because as I have been reminding some of my Des Moines clients and friends this week — nothing has changed until a law is passed), I and your friends here at Ann M. Hartz, CPA are in your corner.

So … thank you.


Ann Hartz
(515) 707-0884

Ann M. Hartz, CPA

5 Tips on How to Become Wealthy in Des Moines

5 Tips on How to Become Wealthy in Des Moines

As we continue to keep our eyes on what’s happening with the GOP tax reform bill in Washington, we are focusing on an entirely different kind of “tax reform” around here:

Tax planning with our smartest Des Moines clients.

Because something that is a commonality among our wisest clients is that they get AHEAD of the game with their taxes, and don’t let life’s inertia weigh them down from taking pro-active steps to avoid paying unnecessarily high tax rates.

There are all kinds of legal and ethical deductions that can keep your taxes down — but only if you take positive action before the end of the year.

So if that interests you, shoot me an email using the link at the top of the page or call us at (515) 707-0884 and let’s get ahead of the game for your 2017 taxes.

Now, speaking of my smartest Des Moines clients…

Many of my wealthiest clients have had to work their way up the scale, and to do so, they’ve had to adopt a different set of habits from most other people in Des Moines.

We can learn a lot from them, these among our ranks who had to create the wealth they now enjoy. More precisely, it’s the habits that got them to where they are that we need to focus on and learn from.

I thought I’d take some time to share with you some observations I’ve made as I’ve worked with clients who have done extremely well, financially.

I’m presuming, here, that you’d like to join those ranks … so here are five things which I’ve observed, that I believe will help you get there.

5 Tips on How to Become Wealthy in Des Moines
“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” -William Arthur Ward

As I’ve watched clients in Des Moines go from one end of the income scale to another, over the years, here are five habits I’ve seen carried by all of them who moved *up* that scale (and those who started there — without these, well, they went the other direction) …

1. Putting off today what you can have tomorrow
The wealthy usually carry a willingness to live beneath their means for as long as it takes to reach their financial goals. While their peers are showing a tendency toward embracing the good life at the first sign of prosperity, the would-be wealthy take a pass on all of that.

While others are saving 6-10% of their annual incomes — usually for retirement — people who want to be wealthy often save 20, 30, 40 or even 50% or more of their incomes.

Imagine how much money you’d have saved in 10 years if you saved half of your income during that time? The fact that no one ever sees this happen is one of the reasons that people believe that the wealthy somehow “come into money.”

2. Spending well
The self-made wealthy learn early in life that you never pay full price. The combination of this habit with delayed gratification is a powerful force when it comes to growing wealth. Not only do you spend as little money as possible, but you buy at a discount when you do.

While most people are buying the most expensive house they can afford, the rich-in-progress buy beneath their means, and buy the cheapest house in the neighborhood to boot. They first ask themselves, “How much house can we truly afford right now?” The same is true of buying cars: If one wants to be rich someday, he buys a conservative car — and buys it used.

3. Fleeing from consumer debt
Debt represents a reduction of future cash flow and the wealthy will avoid it. By paying cash on the barrel, there are no strings attached to what you buy that might compromise your ability to continue saving money at a high rate.

Notice how the drive to save large amounts of money causes frugal spending habits, which then enable the ability to make purchases without using debt; the three habits combine to form a pattern that brings the aspiring rich to the point of great wealth earlier than an outsider might expect.

4. Seeking low risk/high yield investments
If you want to be rich, the first rule of investing is to not lose money! If you have a small amount of money to invest you might be tempted to put it all into high-risk growth stocks in the hope that a big run-up in value will make you rich. But if you have — or hope to have — a large portfolio to invest, you might not take that kind of risk. Your investments will be in assets that are unlikely to collapse in price, reasonably likely to grow in value over time, and able to provide a steady cash flow while you wait for them to grow.

For someone who is starting out, a perfect investment asset might be an undervalued (and therefore very likely to grow) blue chip stock (not likely to collapse) with a history of above-average dividend yields (steady cash flow). Or a good index fund. He doesn’t need for his investments to make him rich — he’s already on his way there, and just wants to further grow his wealth, steadily and predictably. (Of course, the specific strategy will vary from person to person, and at different stages of life, so this isn’t necessarily intended to be personalized investment advice for you.)

5. Only doing what matters most
My wealthiest Des Moines clients have the ability to center on the most profitable ventures and to let go of nearly everything else. They often do this by delegating non-profitable activities to others, if not making those activities somehow go away altogether.

This is easier to do when you have money to pay others to handle them for you, or when your finances are relatively uncomplicated. If, for example, the rich person has a business, he might pay someone to handle specific aspects of the operation that are necessary but produce little or no revenue. That frees him to concentrate all of his efforts on generating more income for his business. As a result, his business and his income grow much more quickly, making him wealthier still.

One thing I’ve seen in my clients with means: How to become wealthy is really a lifestyle as much as anything else. Once you adopt it — by living beneath your means, staying out of debt, and saving large amounts of money constantly, you have capital to invest (conservatively) and to pay others with, in order to free you up to make even more money. It’s not so hard to see why the wealth of the self-made rich seems to spring out one day as if there’s a winning lottery ticket in the mix.

But that’s simply not the case, and my self-made wealthy clients know this.

We’re just a phone call (or email) away: (515) 707-0884 (


Ann Hartz
(515) 707-0884

Ann M. Hartz, CPA

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