Happy Thanksgiving 2019 from Ann M. Hartz, CPA to your family

Happy Thanksgiving 2019 from Ann M. Hartz, CPA to your family

Imagine …

You are ripped from your childhood home while young and trafficked across the ocean to a country where you don’t speak the language. You are sold to practitioners of a religion that you don’t understand, and there is no apparent possibility of return.

Imagine …

You are quietly going along with your life, worshipping God the way you desire — and then the country you love treats you like you are a second class citizen, and tries to shut down your private expressions. So you band together with friends and family, and you get out of dodge and settle someplace else.

And then most of your friends and family die.

But then, coming out of wilderness walks a man who brings hope.

He is the same man who was ripped from his childhood home while young… and he is now approaching people from the very same country as those who stole his childhood.

And yet he comes in friendship.

The Spanish monks who purchased Squanto from his English slavers did so in a mission of restoration. They taught him languages, they set him free, and after a period of a few years (during which he also learned English), he made it back to his native land.

But his childhood tribe had been decimated by smallpox and was gone. He found his way to another tribe, the Wampanoag … who just so happen to be watching this new band of settlers — the pilgrims.

And Squanto and the Wampanoag help these English pilgrims survive their second harsh winter, and hope begins to arise.

These are the seeds of Thanksgiving.

Imagine …

You are leading a country in the middle of terrible war, one that is ripping families apart and causing bloodshed and death. And you reach towards this history, because you KNOW that no matter what kind of devastation might be surrounding you, the only way through it is to reach for gratitude.

Because when Abraham Lincoln established Thanksgiving as a national holiday in 1863, he did so with the understanding that there is ALWAYS the possibility for hope on the horizon.

And this week, we would do well to remember these stories. To remember that no matter what we are facing, we can reach towards the example of those who have gone before us to find that hope, and move towards gratitude.

I hope you understand that we here at Ann M. Hartz, CPA are so grateful for YOU. We’re grateful for the opportunity to serve Des Moines , and to be a beacon of financial hope for our local families.

YOU are like family to us, and we look forward to walking with you through whatever might come in 2020, saving you on your taxes, and pointing you towards gratitude and joy whenever possible.

Happy Thanksgiving, from our family to yours.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

How Des Moines Taxpayers Can Avoid Fake Charities

How Des Moines Taxpayers Can Avoid Fake Charities

Is the holiday season indeed “the most wonderful time of the year”? One could make a strong argument.

However, for every gift we receive there are 10 or so emails asking us to give to a cause. Whether online or via snail mail, charitable organizations capitalize on the season’s tax-reducing giving benefits.

No one can blame these organizations — it’s people like me who help their donors (YOU) realize that their (your) tax bill can be reduced, and giving can be amplified as such. Many of these orgs are doing great things.

But there are some out there who do send year-end appeals with mail-icious intent. (See what I did there?)

Yet if you know a few key signs to look for, Des Moines scam artists don’t stand a chance. But they can be tricky!

Here’s how to tell…

How Des Moines Taxpayers Can Avoid Fake Charities

“To do more for the world than the world does for you — that is success.” -Henry Ford

An unfortunate reality: fake charities abound in this country. Many individuals set up nonprofits for the sake of financial gain — and some are really good at the disguise. Charity Navigator is a simple online tool to look up the validity of various charities (or lack thereof).

The Fraud Advisory Panel has a plethora of resources for you to thumb through should you wish to learn more.

Contact Authorities

If you come across a charity that you know is a scam, the IRS recommends the following:

  1. Don’t reply.
  2. Don’t open attachments. They might carry malware that will affect your computer or phone.
  3. Don’t click any links. (If you have in the recent past, visit IRS identity protection for further steps to take.)
  4. Forward the scam email, preferably with its full headers (to, from, subject, etc.), to the IRS at phishing@irs.gov.
  5. Delete the original email.

Seek Real Causes to Support

The nature of my thoughts today make it sound like you should always be skeptical. And that’s true … to an extent.

Like I said earlier, there are MANY out there who are doing great work through legit nonprofits. That’s why it’s a shame this season gets sullied by a bunch of people seeking money for illegitimate reasons. But my advice to you is to dive personally into a nonprofit or two throughout the year. Don’t let November or December roll around, only for you to give money to an organization you don’t know much about.

Attend an event, ask your close friends and make your support a year-long process.

“You have not lived today until you have done something for someone who can never repay you.” – John Bunyan

So consider giving this holiday season.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

A Trusted Des Moines Professional’s Thoughts For Your 2019 Taxes

A Trusted Des Moines Professional’s Thoughts For Your 2019 Taxes

November is a wonderful start for holiday season with several traditions to match: pumpkin-spiced everything, no-shave November (apologies to those spouses affected), watching football and of course … Thanksgiving.

Sorry to poke my accountant’s green shades into all those festivities, but it also happens to be a perfect time to strategize. (Add that to your new November “traditions” list.) We’re going to look at five key tax moves you can make it in November. Before we know it, spring will bloom and you’ll be glad you read this.

But just reading/talking about these moves is one thing — acting on them is what will save you money in the future.

Now THAT’S a tradition worth celebrating no matter the month.

Please reach out to me so that we can start implementing some of these strategies ASAP. You bring the latté; I’ll bring the game plan.

A Trusted Des Moines Professional’s Thoughts For Your 2019 Taxes

“Let us remember that, as much has been given us, much will be expected from us, and that true homage comes from the heart as well as from the lips, and shows itself in deeds.” -Theodore Roosevelt

In Q4, we often strategize for our 2019 taxes. But this is also a vital time to take 2020 into consideration. Don’t wait until January 1 to make some sort of new year tax resolution. We all know how those end up most of the time.

Instead, let’s get a jump start on this year and next. The first step is to determine your income thus far in 2019, then forecast what that number will be by year’s end. Once you have that number, we can decide what 2020 will look like (More? Less? The same?) — and strategize accordingly. Doing this allows us to defer and/or accelerate write-offs. I’ll help you get this process started!

Itemized vs. Standard Deductions

The two-year strategy also allows you the option to itemize or use larger standard deduction amounts. The Tax Cuts and Jobs Act (TCJA) 2019 standard deduction is $12,200 for single filers and twice that amount if filing as a married couple.

There are a few more strategies to look at when it comes to deductions. And we’re best served sitting down together to discuss your unique tax situation.

Focus on Form W-4

The TCJA certainly shifted tax rates and income amounts taxed beneath those rates. Unfortunately, many were not ready for the refund they received last spring because they were unaware of rate changes.

In an effort to adjust your expectations, this IRS withholding calculator will take your paycheck and provide a more accurate forecast for the spring. This is a crucial move in November because we can get a sense of what paycheck changes need to happen now — there’s still time to spread paychecks out moving forward.

Invest in Your Health

Many Des Moines companies offer a medical flexible spending account (FSA), and if you’re one of those lucky individuals it’s time to schedule that doctor appointment. Many FSA accounts require that the money saved is spent by December 31, so don’t hold onto that cash too long.

‘Tis the Giving Season

Naturally, November and December present a big push for nonprofit + charitable giving opportunities. If you aren’t factoring how these giving strategies could affect your tax strategy, then we must meet to discuss why it’s so important. However, if taxes are the only reason you’re giving to a charity, I might suggest you rethink “why” you give.

If there are no organizations on your radar, do some research in your area. It’s vital to support Des Moines local businesses, and therefore communities, with the money that’s been entrusted to you.

And there you have it! There are certainly more November tax strategies, but these are a good start. Please let me know if you have any questions. I’d be more than happy to start a conversation.

Until then, may we prepare our stomachs for the Thanksgiving feast. And more than good food and drink, may we look for ways we can serve others in need — so that we can all truly give “thanks” this holiday season.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

Ann Hartz’s Tips For Using Credit Cards And Avoiding Credit Card Debt

Ann Hartz’s Tips For Using Credit Cards And Avoiding Credit Card Debt

Do you remember that old Visa commercial? It had quite a run during sporting events about a decade ago … everything in the restaurant/market is running smoothly — chefs are shipping up meals, customers are moving in an orderly fashion, credit card payments are keeping the line short, and then…

…the main character pulls out his wallet, thumbs for some CASH and ruins everything.

Credit cards are now so woven into the fabric of our society, it’s hard to imagine the slower, cash-centered society of yesterday. And with smartphones constantly evolving into new kinds of app-based payment systems on their own, the process is accelerating further.

Money can start to become mere numbers on a computer screen. And that’s when things can get really out of control for many Des Moines families.

So managing all of this — especially the credit card accounts — has become a more essential skill than ever.

Ann Hartz’s Tips For Using Credit Cards And Avoiding Credit Card Debt

“To contract new debts is not the way to pay old ones.” – George Washington

Let me say off the bat: it is not a bad thing to own multiple credit cards. However, if you possess multiple credit cards that you rarely touch, it’s time to pare down. Signing up for in-store credit cards, for instance, to capitalize on savings and rewards is okay if you shop there often.

But please consider credit cards only if you will use them on a regular basis. And then set a budget for each one.

Psychologically, buying things with a credit card is a cinch — all you do is run a piece of plastic through a machine. But before you know it, all that swiping adds up to a heaping amount of debt. In 2018, the average American household possessed an average of $5,700 in credit card debt.

An unfortunate statistic, but something we can take steps toward alleviating if we stick to a regular budget. Here is a list of the best online budgeting tools (but if you use one, make sure you check and update it on a weekly basis):

Whichever option you choose, consider downloading the app to your smartphone (available on all three resources listed). The more you get in the habit of checking your credit card spending, the better handle you will have of your money.

Rewards and Reports

Credit card reward systems have redefined financial strategy for countless Americans over the last decade. Many credit cards offer cash back, discounts or other free rewards in exchange for the amount you swipe. If you are going to swipe a credit card, at least make it count with a certified system.

Lastly, running a regular credit report is essential if you have any credit cards on file. Visit Annual Credit Report to have the three major credit bureaus — Experian, TransUnion and Equifax — run a credit report for you today. A credit report will tell you how many delinquencies you have against your credit (i.e. how late you are to pay credit card pills) and your debt-to-credit ratio.

This is much more than “knowing your score” — which many platforms now provide. It’s a way to verify that you don’t have extraneous accounts piling up, and that you are also not getting victimized by account or identity theft.

When you adhere to credit card budgets, rewards and reports, you are well on your way to managing the plastic. Because the amount of credit card debt has soared so high over the years, credit cards often receive a bad rap. But, like many facets of adulthood:

“With great power comes great responsibility.”

Funny how a little rectangular piece of plastic can have so much power over your life, and that’s why you should use it wisely — at your discretion. The benefits of credit card use can be vast: track spending, maintain a credit score or receive cash back.

But if they are causing out of control spending … it’s a smart idea to just kill them altogether. Go full-on Dave Ramsey before you find yourself buried.

The main thing is to keep yourself in check, and stay that much closer to wise spending.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

Ann Hartz’s Guide for Lending Money to Family Members

Ann Hartz’s Guide for Lending Money to Family Members

Family can take so many different forms these days, whether it’s biological or otherwise, but for a certain segment of my Des Moines clientele, there is a particular privilege that might kick in this week:

The parent tax.

If you have children, what better way to teach them about the realities of our taxation system than by skimming 25% of their collected Halloween candies and setting them aside?

Shoot, you could even get creative and do some “parent tax planning” — i.e. making proactive plans with your children about particular kinds of candies that are subject to greater tax, and others that can be collected tax-free (in my opinion, anything “Reeses” should be double-taxed, but that’s just me).

Just giving you some #ideas. 🙂

But there’s another “privilege” that occasionally presents itself among family and close relationships, that can bear unplanned consequences — that is, unless you do it right.

Lending money to family members.

Yikes. Let’s dive in.

Ann Hartz’s Guide for Lending Money to Family Members

“Families are the compass that guides us. They are the inspiration to reach great heights, and our comfort when we occasionally falter.” – Brad Henry

Individuals who are strapped for cash and in a pinch often look to family members for help, and rightfully so — your immediate family has been with you since day one, and to ask a friend (even a really good one) for money can be uncomfortable with too much that can go wrong.

But there are a few tax ramifications you should know before cutting a check to those closest to you. And if you have any further questions after the following points, please do not hesitate to call and ask.

Family Is Informal

Often, transactions between family members are informal and not properly documented (the agreements don’t have an interest rate or require regular payments). Parents or grandparents who offer a loan often won’t hold the recipient to a payment schedule (depending on the severity of one’s financial troubles).

But according to tax rules, sharing within family presents a conundrum. Any family loan payment without an interest rate is charged as income to the parent from the child. Therefore, the interest is accumulated through that “income” and parents or grandparents are responsible to report interest income on their taxes.

It’s important to note, in 2019, that parents or grandparents can classify the loan as a “gift” up to $15,000. And a married couple can give a total of $30,000.

A Formal Agreement

To keep things from getting tricky on the tax side of things, please consider a formal, written agreement when sharing money between family members. (I can help answer questions for you on this process.)

In short, the document should include an agreed-upon (IRS-approved) interest rate depending on how long the loan exists — monthly, quarterly, etc.

The borrower should make these payments on a regular basis. If he or she does not, then the IRS could question if the loan was really a loan in the first place, and might count the amount as a gift in sum.

Two important rules on imputed interest:

  1. A loan less than $10,000 is tax-exempt — that small of an amount isn’t something the IRS will fret over.
  2. However, loans over $10,000 are a little different. Parents or grandparents that offer such a larger loan have the ability to report imputed interest at a lower federal rate.

A Real Life Example

Take (fictional) Billy and his (fictional) parents: Scott and Karen.

Billy wants to buy a home, and Scott and Karen would like to help him with the down payment. They give Billy $100,000 and charge 3.22% interest — the approved interest rate at the time compounded semiannually.

An option for Billy is to count the loan as a second mortgage on his home. That way, he could potentially deduct imputed interest on his tax return. Scott and Karen’s loan to Billy is a nice gesture, but hurts them financially in the long run. They could have received investment income on the loan paid to Billy, and now it will reflect on their income taxes through imputed interest.

But the real problem for this family of three, and your Des Moines family should a similar situation arise, is when things are not formally documented and agreed upon. A quick internet search will provide a loan agreement form, or I can guide you in the process.

The key is over-communication and filing away the information correctly. Nothing in life is guaranteed, and if you write down important information within the context of a family loan, then you might prevent problems for others down the line.

Helping family is a good thing. But even though I’m biased, making sure your taxes are squared away is nearly just as good.

Warmly,

 

Ann Hartz

(515) 259-7779

Ann M. Hartz, CPA

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