Hope for your financial life and beyond

My January Fuss-a-Thon at Business Owners Has Begun

January 16, 2014 by 9 Comments
Form_1099-Misc_2013

Download this form at IRS.gov

2014 has begun, and for me, and most other accountants, that means the start of busy season. This is because we are assisting our business clients with year-end issues – and sometimes “assisting” turns to “fussing at”.  With a smile, of course.

So, what do I need to fuss about the most? Here are two things (out of many) that an accountant wants you to know and do regarding year-end business issues.

1099s

What I am referring to here is Form 1099-MISC. This form is an information return that you as the business owner are required to give to certain vendors. The rules change from year to year, but for now, here’s who gets one:

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Filed Under: Taxes Tagged With: , , , ,

This One Stock Chart Could Make or Break You Over the Next 20 Years

January 15, 2014 by 22 Comments

stock chartMy investment plan is pretty simple – invest in retirement and non-retirement stock and bond mutual funds and sprinkle in a little real estate investing along the way. I invest for the long-term and don’t pull money out of the market at the first sign of a downtrend. Instead, I continue to invest monthly during a downturn to pick up more shares of stock at lower prices.

Because this is my philosophy, I don’t pay attention to the day-to-day fluctuations of the market. I quit listening to CNBC and other financial news programs years ago. While some of the programming was tolerable, they are news organizations, interested in ratings and what’s happening with the markets in the short-term.

The majority of the opinions I heard on any given day about the state of the markets and what I should be doing accordingly, didn’t jive with my long-term investment strategy.

One aspect of investing that has always intrigued me though is the stock chart. When these pop up on the news channels or I see one online (like I did yesterday) I often take notice.

Short-Term Stock Chart

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Year End Tax Planning For Small Businesses

December 17, 2013 by 14 Comments

Plan MazeThe following is a guest post by Kim Fourman.

Taxes may not be foremost on your mind right now, but they are important to think about before the year is over. It would be wise to know what kind of changes are coming and how that can affect you. For those in business, including the self-employed, here are two big changes coming for this year’s tax return.

Section 179

So what is Section 179 anyway? Well, first you need to understand depreciation. If you buy an asset (say, a computer), you are generally not allowed to expense (“expensing” means writing off or deducting) the entire amount in the year that you purchased it. Instead you are supposed to spread out the expense over several years.

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What Good Is Freedom When You’re Told What To Do With It?

November 25, 2013 by 31 Comments

U.S. Constitution - We the PeopleIn the fall of 1620, a group of 102 passengers sailed from the coasts of Western Europe across the Atlantic. Their journey was filled with danger as they traveled in a craft none of us would dare think of sailing today. Much like the courageous astronauts of the 1960s, they faced considerable danger and extreme conditions as they pioneered into an unknown and mysterious world.

Colonies had been established before in the New World but none for such a reason as this. The purpose of those earlier establishments in the Caribbean, and more recently in 1607 at Jamestown, had simply been about wealth creation – find the riches of the new land and return them home for the glory of the mother country.

Simple. Materialistic. Focused.

While some on the Mayflower sought economic prosperity, there was a group aboard interested in something much deeper and profound than the accumulation of wealth. These were known as the Separatists who were fleeing religious persecution inflicted on them by the Church of England. The church in that time controlled religion, dictating to the people how, when and where they were to worship. Choose to worship in a way the church forbid, and you would face severe punishment.

So faced with bigotry and religious intolerance, they fled to a new world with the hopes of fulfilling the one deep desire burning in their hearts…the freedom to choose.

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Filed Under: Current Events, Insurance, Leadership Tagged With: , ,

5 Common Rental Real Estate Mistakes Landlords Will Make

November 13, 2013 by 34 Comments

rental real estate mistakesSo, you are ready to take the rental real estate plunge and become a landlord. Awesome! I hope that you have come to that decision by desire (you really want to do this) and not by necessity (you were forced into it because your house wouldn’t sell). One of those scenarios (hint: the first one) generally works out better than the other.

My wife and I have been renting properties for some time now and our landlord experience has been positive. I believe our success comes from a desire to run a quality business, as we never considered this to be a whimsical adventure. We spent over a year studying the idea to make sure rental real estate was right for us because we knew it has its darker side. I believe we set ourselves up for success as landlords by doing that because we went into it with our eyes wide open.

Rental Real Estate Mistakes Landlords Should Avoid

Even with all our preparation we made some mistakes with our rental real estate. Here are five big ones I want to help you avoid.

1. Paying too much for a property

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Filed Under: Investing, Real Estate Tagged With: , , ,

ATTN Men: A Woman Values Security. Get It For Her!

November 4, 2013 by 29 Comments

What’s the final hurdle for couples to overcome the money fights in their relationship? Find out now in this final installment of my series.

Part I: How Couples Can End the Money Fights (a look at the importance of communication)

Part II: Relationships Blossom When Couples Budget

Road with guardrailMy wife and I were making such progress.

Goals and values being shared in open and honest communication – Check.

Emotional barriers torn apart and strong connections being rebuilt through the sharing of feelings – Check.

Budget in solid working order after months of trial and error – Check.

Frivolous spending habits being altered through discipline and focus – Check.

Still, it wasn’t enough to end the tension over money. Something still lingered subtly beneath the surface that was keeping us from moving forward. With our momentum stalled, we decided one day to take a step backwards…backwards to Step One that is. That’s right, more communication.

This time around as I listened deeper to my wife talk about her needs, here is what I heard her say…

“I need to feel secure.”

Some Thoughts on Security from Mrs. Luke1428

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Filed Under: Marriage, Planning, Relationships Tagged With: , ,

Getting An Electric Car For Free Through Tax Credits

October 30, 2013 by 11 Comments

Welcome to a Q & A tax session at Luke1428. Today we are discussing how to fund the purchase of an electric car with tax credits. Some states offer tax credits as incentives for many transactions, including purchasing or leasing an electric car.

To answer your tax credit questions I’ve pulled in none other than Mrs. Luke 1428, who just happens to be a CPA. So here we go.

Electric Car

The Nissan Leaf – source of a nice little state tax credit

Q: What are tax credits and how can I use them?

A: Great question. First, I’d like to make sure that we’re clear on the difference between a tax credit and a tax deduction. As an example, let’s assume you have $50,000 of taxable income, and your tax rate is 10%. Let’s compare the difference between a $1,000 tax credit and a $1,000 tax deduction.

A tax deduction lowers your taxable income. Without any deductions, your tax would be 10% of $50,000, which is $5,000. So, a $1,000 tax deduction lowers your taxable income to $49,000. Then we apply the 10% tax rate and come up with a tax of $4,900.

Tax Deduction Savings: $100.

Now, instead of the tax deduction, let’s try a tax credit.

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Filed Under: Saving, Taxes Tagged With: , ,

Shock Treatment to Break Your Financial Procrastination

September 11, 2013 by 19 Comments

Shock coilsCollege breeds procrastinators.

At no time of my life did I put more things off until the last minute than my first few months in college. Every hour something new would entice me to put the books aside and enjoy the other, more exciting things college had to offer.

The pickup hoops game at the gym.

The late night pizza runs.

The cute girl one dorm over.

Time and time again this would happen, especially early on in my college life. As a result of my attention to anything unrelated to studies, I would often find myself starting papers at 11:00 pm that were due the next afternoon. Talk about putting your back up against a wall. It was an all night scramble of writing, filled with Mountain Dew and Ho-Hos.

“Fairly quickly” is the answer to the question “How long did it take you to develop a more disciplined attitude?” Had to…my freshman GPA (and ultimately my graduation) was depending on it. I realized there was no way I could maintain those negative patterns of time management and succeed at that level of education.

Procrastination creeps into all areas of our life. We put off dealing with relationship issues, work assignments, our spiritual health and even kid problems. Perhaps in no area does it rear its ugly head more so than in the world of personal finance. What is it about money that keeps us from confronting our difficulty with managing it?

Are you a personal finance procrastinator? Ever said any of these things:

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Filed Under: Investing, Vices Tagged With: , , ,

Are You Ready to Live to 100?

September 9, 2013 by 24 Comments

100This coming February, 2014, our family will be gathering in central Indiana to celebrate a centenarian life. My grandfather will be turning 100 and I’m sure there will be a festive party at the retirement community where he lives. What makes this even more remarkable is that he will be the second member of his family to reach this age. His sister is still alive and kicking at 102.

Both are generally healthy for their age and maintain an active lifestyle (as much as possible for a 100-yr. old). My grandfather, a preacher all his life, still helps lead church services for the other retirees and is an active writer in his journals. His sister still enjoys playing pool in the rec-hall basement. They both tune in every day to watch the Chicago Cubs play and then rehash the game with one another.

While living to 100 is still not the norm, their longevity represents a growing trend in the U.S. and the rest of the world. People are staying healthier and living longer. In fact, the Population Division of the United Nations estimated in 2012 there were 316,000 centenarians worldwide, with the U.S., Japan and China leading the way with the most.

This becomes even more pronounced when it is compared to statistics from the 1930s, the decade Social Security Act was passed into law. [Read more…]

Filed Under: Retirement Tagged With: ,

How to Choose a Career: 6 Tips For Making the Right Choice

September 4, 2013 by 37 Comments

how to choose a career“So what’s going to be your major when you go to college?” The question annoyed and frustrated me as an 18-yr. old high school senior. I had no idea how to choose a career at that age. Nothing had ever seemed to jump out at me.

So, when asked, I’d sheepishly throw out a few ideas.  Then say I was just going to take the required core classes my freshman year of college to get those out of the way. Everyone seemed to think that was a good idea.

College did indeed open up a new world of vocational options for me – careers that I had never considered before. My first two quarters were spent getting adjusted to school and meeting new friends. Still nothing overly intrigued me. Business management? Optometry? Finance? Ministry? What direction should I go?

Then, to satisfy a general ed requirement, I took Intro to Psychology in the spring quarter.

I was hooked.

Learning about the intricacies of the human mind fascinated me – how it functions and how we interact with other people. “Plus, I’m a good listener,” I thought. “That should come in handy in that field, right?” So by fall quarter of my sophomore year I was a full-fledged Psych major with a dual emphasis in counseling and child and family studies.

Just to be clear in case you missed that – I made that decision based on one class and the fact that I was a good listener.

But was it the right decision?

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Filed Under: Career, College, Work Tagged With: , ,

Investing Made Easy (Part V): Common Investing Mistakes

July 15, 2013 by 19 Comments

oops - MistakesIn this final edition of the Investing Made Easy series, I’d like to detail some common investing mistakes. Investing doesn’t have to be complicated but we make it so by doing some very silly things. In the end, our meddling brings nothing but frustration and lower returns.

I’ve already touched on a few of the most common mistakes in previous articles such as not having a plan, failing to evaluate one’s risk tolerance and ignoring investing fees.  And of course we want to understand every investment into which we place our money. If we don’t understand it, we shouldn’t be investing in it.

I’ve noticed through the years however, that other, less obvious issues inhibit me from having the success I desire. Each of them have hampered my investing at one point or another and it was only through losing money and honestly evaluating myself in the mirror that I was able to overcome them. (“Overcome” is a strong word, because they still creep back up from time to time and I have to fight them off again and again.)

Common Investment Mistakes

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