Yes, this is a long list — but it’s the unfortunate reality of our tax code that it’s not even comprehensive! But these items will cover 95% of our clients. Really, this is for ensuring that we’re able to help you keep everything you deserve to keep under our tax code.

Even if for some strange reason you won’t be using our cost-effective services this year, feel free to use this list as a handy guide…

Personal Data
Social Security Numbers (including spouse and children)
Child care provider tax I.D. or Social Security Number

Employment & Income Data
W-2 forms for this year
Tax refunds and unemployment compensation: Form 1099-G
Miscellaneous income including rent: Form 1099-MISC
Partnership and trust income
Pensions and annuities
Alimony received
Jury duty pay
Gambling and lottery winnings
Prizes and awards
Scholarships and fellowships
State and local income tax refunds
Unemployment compensation

Homeowner/Renter Data
Residential address(es) for this year
Mortgage interest: Form 1098
Sale of your home or other real estate: Form 1099-S
Second mortgage interest paid
Real estate taxes paid
Rent paid during tax year
Moving expenses

Financial Assets
Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DIV
Proceeds from broker transactions: Form 1099-B
Retirement plan distribution: Form 1099-R
Capital gains or losses

Financial Liabilities
Auto loans and leases (account numbers and car value) if vehicle used for business
Student loan interest paid
Early withdrawal penalties on CDs and other fixed time deposits

Automobiles
Personal property tax information
Department of Motor Vehicles fees

Expenses
Gifts to charity (receipts for any single donations of $250 or more)
Unreimbursed expenses related to volunteer work
Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
Investment expenses
Job-hunting expenses
Education expenses (tuition and fees)
Child care expenses
Medical Savings Accounts
Adoption expenses
Alimony paid
Tax return preparation expenses and fees

Self-Employment Data
Estimated tax vouchers for the current year
Self-employment tax
Self-employment SEP plans
Self-employed health insurance
K-1s on all partnerships
Receipts or documentation for business-related expenses
Farm income

Deduction Documents
State and local income taxes
IRA, Keogh and other retirement plan contributions
Medical expenses
Casualty or theft losses
Other miscellaneous deductions

We hope this helps, and we really look forward to seeing you this year!

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

Here’s the thing about most financial resolutions: They don’t usually last even until the end of January. That’s because making a permanent change in our behavior requires both time and a steely resolve. But I’ve found that we can develop financial character one action at a time.

So in that vein, here are some financial practices to take you from pauper to prince or princess if you add one each year. If you’ve already got one down, move to the next on the list.

#1 MOST CRITICAL: Resolve to become (and stay) debt free. Now, I’m not Dave Ramsey, but there’s a reason why he’s become so popular: his approach works. I’d say that you can have a fixed-rate fixed-year traditional mortgage on your house — but nothing else, please. No equity line of credit on your house. No car payments. Certainly no credit card debt. Because you simply have to learn to live within your income — which, unfortunately, sometimes means going without. The millionaires among us really are frugal. So learn to enjoy that process, and it’s a fantastic start.

#2 Automate your savings (AKA Pay Yourself First). You can start by getting the entire match if your company offers a 401(k) plan. Usually this translates to saving 5% of your salary while the company contributes a 4% match, which is the fastest way to get an 80% return on your money. Most Americans forgo this match, believing they need to spend 100% of their salary. But you can learn to think like a millionaire and live well on 95% of what you make. If you don’t have a 401(k) plan, act like you do, and sock away 5% automatically.

#3 Fully fund your 2012 Roth IRA. This is $5,000 in 2012 and $6,000 if you are older than age 50. If you can’t manage the entire amount in January, put in $416 monthly. Automating deposits in an employer-defined contribution plan is easy. Fortunately, automating saving in a Roth IRA or a taxable savings plan is equally painless. Most brokers offer an automatic money link between your checking account and an investment account. Set your savings on autopilot, baby!

Remember — these steps build off one another, so if you already have done the first 3, here’s your next step:

#4 Save another 5% in a taxable investment account. Automating savings is great, automating investment is even greater. Key word here: automate. At this point, you’re hitting a mark of saving 15-20% of your income. That’s a fast-track to long-term prosperity.

But I’m not quite done, grasshopper. However, I’m going to leave you with these for now, and come back to this again in the weeks ahead.

Happy New Year!

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

Because time is short, and some moves do require more than this week to pull off, I’m restricting myself to those items which you can realistically affect before the end of the year.

This will be short, and (hopefully) sweet to your wallet…

1) Use 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 employers allow a 2-and-a-half month grace period. So check with your employer to see what your personal deadline is for utilizing your FSA savings.

2) Make an Extra Payment on Your Mortgage
If you own a house with a mortgage, and you can swing the cashflow hit, add an additional payment before year-end, and the interest on that payment will be deductible for 2011. Of course, that means that it WON’T be so for 2012, but perhaps you can use this as an “extra” payment … and get ahead of the escrow game.

3) Make the Switch to a Roth IRA
Roth conversions are taxed in the year the conversion happens. However taxpayers have the option to undo part or all of that conversion by their filing deadline. 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.

4) The old standby
You know how I feel about charitable giving by now (I hope). This week, of course, is a big one for non-profits who are the happy beneficiaries of last-minute donations. You can pay early on a monthly gift, or give a lump-sum gift. The purpose (aside from the many, many benefits to the organization, and to you), of course, being to knock you into a different tax bracket, perhaps, or to simply cut your tax bill, regardless of the bracket status. Note: This is the LAST year where charitable donations from an IRA are handled generously.

Now, there are plenty others. But these are the quickest, and the easiest (aside, perhaps, from the Roth conversion — but that can be done quickly).

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

As promised, I’ve compiled some information on expiring tax breaks for 2011, as well as some suggested moves to make before December sees its ball-dropping end.

But before I share them with you, please allow me this important disclaimer: it’s difficult to make blanket recommendations to all my clients, simply because everyone’s situation is different. If you are uncertain about taking action on any of this information, well, that’s why we do tax planning — so give us a call in that instance (800-279-3768).

Disclaimers aside, here are some relatively-easy tax moves you can make before 2012:

Filed under: Increased-Deduction strategy
With one caveat: increasing deductions could cost you if you end up owing under the Alternative Minimum Tax (AMT).

1. Pre-Pay and Accelerate
Mortgage bills, college tuition, property taxes — all of these can add deductions to your bottom line, so cherry-pick some 2012 bills if cashflow allows, and you’ll get to mark them against this year’s taxes (only January’s mortgage payment counts for this, I should hasten to say).

And you can “accelerate” certain expenses like optional medical procedures (dentistry is always a ripe source for procedures to implement, unfortunately ?), again, doing so if cashflow allows.

2. Donate
It’s not just because ’tis the season, but often (if we’re all honest) because the year-end is so close. So, obviously, when it comes to taxes, giving to a nonprofit can be like a money-saving gift to yourself. If you itemize your deductions, you can claim your charitable donations, both of cash or goods.

In fact, if you’re *close* to being able to itemize deductions, making some nice gifts this month can push you over the top into some major tax-savings. And, of course, there’s the added benefit of what happens to YOUR mindset when you give.

Filed under: Buying stuff you already need — and saving on taxes
3. Energy-Savings and Big Cars
We ‘tax people’ have been pounding this drum for a while, for the simple fact that (because of the last “stimulus” package) replacing windows, doors, and HVAC systems– as well as installing new insulation–could net you a $500 tax credit on your 2011 tax bill! Credits always beat deductions. A solar energy system gets a 30% credit with no upper limit.

How about that fancy new vehicle you’ve been eyeing? Or that energy-sucking flatscreen? Buy it before the end of the year, and you are eligible for a deduction on the state and local sales taxes.

But you can’t deduct both state income taxes and general sales taxes, so the deduction is usually most beneficial to our clients who actually live in the no-income-tax states. By the way, this sales tax deduction is scheduled to expire on Dec. 31.

Filed under: Common sense
4. Please stop loaning extra funds to Uncle Sam
Do you intentionally get a big refund each filing season? Quit that! You’re providing Uncle Sam an interest-free loan of your money.

Submit a new W-4 now so that your payroll withholding is more closely in line with your future IRS bill. It could even give you a few extra dollars at the end of the year to spend on holiday gifts!

Oh, and just so you know, it’s growing very likely that whatever Congress decides on tax law changes, payroll calculators may not have time to update by January 1st. This means that even if you request the changes, your withholding may not reflect things until 2012 … but making the change will still impact your taxes — it just might not be obvious until next year..

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

Personally, I prefer avoiding this mess altogether, but I just KNOW that many of my clients feel differently. So, if that’s you…here you go:

Expect some Black Friday sales to start on Thursday. Many retailers will start offering discounts online on Thanksgiving day. And some, such as Amazon, will offer Black Friday deals several days before November 25 — so hot items may sell out before the big shopping day after Thanksgiving. And, as you’ve probably seen, some stores (like Target) are even opening on Thursday…

Don’t assume the best deals are only in the stores. It’s a tradition for a lot of people to get up at the crack of dawn and camp out in front of stores to scoop up deals. But a lot of “doorbusters” (those deeply discounted items retailers use to get consumers in the door early Friday) will be available online, too — especially on big-ticket products. And if an Apple product is on your gift list, you’ll probably find it for less online (at Amazon.com, MacMall.com or MacConnection.com) than at an Apple store — AND you may escape sales tax on your purchase (I just had to get that one in there, as a tax pro ).

Only brave the crowds if you’re trying to snag an extremely limited item. You have a better chance of getting the deal if you go to the store – and are first in line. Keep in mind, though, that the items which are marked down dramatically are often cheap items to begin with – not top-selling, name-brand products.

Black Friday is only the beginning. In fact, the best deals on apparel usually appear on Cyber Monday (November 28 this year), when retailers discount items online. Toys will be cheaper the first two weeks of December when Walmart and Amazon go to war with each other to offer the lowest prices and clear out inventory before Christmas. And the best deals on name-brand TVs and luxury items can be found in early December, too.

Watch out for return policy shenanigans. Some retailers tighten their policies around the holidays as a way of compensating for all that discounting they’re up to. Some charge restocking fees if you bring an item back. And some won’t let you exchange items which were manufactured specifically for Black Friday (to be sold at a low price).

This one is pretty universal: Never spring for extended warranties on big-ticket items. There’s a good chance that a salesperson will try to talk you into paying extra for an extended warranty if you purchase a big-ticket item on Black Friday. That’s because revenue from extended warranties helps make up for lost profits on these discounted items. Typically, you’ll pay 10% to 20% more for an item to extend a one-year manufacturer’s warranty through the fifth year of ownership. But most major appliances do not break down within the extended-warranty period. Plus, you might already be covered if you use your credit card to purchase an item.

Just doing my little part to help YOUR economy-stimulation efforts this holiday season get the most bang.

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

I have a few questions for you, which won’t take very long to answer, but can help US help you keep your taxes down, even for this year.

You see, I’m doing something a little different here this week. As you know, I love to write about current events, personal finance issues and information that matters to YOU with my Weekly Note (we try to keep the tax information concise and as pertinent as possible — knowing that most of our clients prefer we handle that all for them), as we did, for example, last week with the information about the looming higher ed bubble.

Well, with two months (less!) remaining in 2011, there may be a few moves we can make that can help your tax hit before we’re forced into “reaction mode” — which is the only mode out of which after-the-fact tax work can be done. So, if at all possible, I’d like to change that paradigm for you by having you answer a few short questions…

So, without further ado — some questions for you:

1) Have you had a significant change in your wage income this year?

2) Have you taken capital gains or losses this year? Are you planning to?

3) Did you start or sell a business this year?
BONUS QUESTION: Do you know anyone who did, that would like input on their tax situation?

4) Did you purchase real estate?

5) Did you make your full contributions to retirement accounts?

6) Have you considered a Roth IRA?

7) Did you withdraw from retirement accounts, and for what purpose?

**8) Have you sent your family and friends our way — and, if not, is there something which we can help you with to make this easier?

9) Are there any other issues you think we should know about?

Now — the answers to these questions form the “tip of the iceberg”, and they will help us to know which direction to take as we work with you over the next two months to prepare for year-end. With your permission, we’ll contact you back, as appropriate, and set up a time to discuss them further with you, whether by phone or other method.

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

Sure, this might seem a bit premature — April is still a good deal away. But there are certain tax deductions and credits which go away in December. And it’s always a good idea to take a good hard look at taking advantage of them while you still have time on your hands.

1. Energy credits are still worth taking. The tax credits for certain basic home improvements — including the installation of insulation, certain HVAC systems, water heaters, windows, doors, and roofing — are skimpier this year.

But what’s worse than skimpier credits? Why, *NO* credits, of course. And since there are no good signs of these credits being renewed, it’s time to get a move on! Go to www.EnergyStar.gov to get specifics.

2. Use capital losses to your advantage. If you have some portfolio losers, but you still like them, now is the time to grab those deductions by selling down positions. After 30 days, you can safely re-purchase any stocks which look like they could still be long-term winners, and retain the capital loss deduction safely (but if you do this before 30 days, you don’t get to record the loss).

3. Re-characterize a Roth back to an IRA. If you converted a traditional IRA to a Roth in 2011, and have since suffered huge losses, you might want to reverse the conversion (which is called a recharacterization).

The reason: Your tax bill is based on the IRA’s value at conversion, so you’ll owe income taxes on money you no longer have. Even better, you also still have a chance to recharacterize a 2010 conversion, but act fast. That deadline is Oct. 17.

I’ll have plenty more to say on these and other subjects as we get closer to the end of the year — but the BEST thing may be to have us sit down with you and take a clear look at your exact situation with you.

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

You know how good coaches are usually famous for making adjustments during halftime of big games? Well, here I am — acting as your financial coach in matters tax-related, and we’ve just about hit halftime for 2011.

You have six months of financial info to use for some quick math about your year as a whole, and to prepare for a pleasant upcoming tax season.

To begin, all you have to do is take your cash flow for the first half of the year, and multiply by two. Add up your wages, dividends, interest, and any other income, and then–if this represents approximately what you’re expecting for the second half of the year–double the sum.

Once you have your estimated 2011 income, give us a call (or send me an email), and we’ll help you determine the appropriate tax rate and deductions to apply. Because once you’re armed with this info, we can help you determine the amount of taxes you might expect to owe for 2011.

By then comparing this against your projected withholding, you can adjust the withholding on your paycheck in advance as needed, and ensure a happy visit to our office in the early winter.

This can also be a good time to organize your financial records and/or get started with some financial software. (Quicken, Microsoft Money, or the free online utility www.Mint.com are some popularly available options for this.) Getting organized now can make gathering a report of all those deductions a breeze come tax time!

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

Well, the dream of freedom, birthed on the 4th , does still live. But let’s face it–our government (especially the IRS) is poised to become a deeper, larger influence in our lives.

And it’s ironic, this month of Independence, to see how much power the IRS now has as probably one of the most powerful organizations in the USA. Solely responsible for collecting
Federal taxes and imposing related penalties, the IRS poses one of the biggest financial threats to individuals and business owners.

They have unique information resources, legal standing, and roles as a law enforcement agency. On top of all this, the IRS has the authority to issue legislation and the freedom to make mistakes without consequences (they’re protected from penalties for false tax accusations)!

So what can we do to protect ourselves from the IRS’ power and potential for financial wrath??? … Well, if there were a concrete answer for that, the IRS wouldn’t be the intimidating and widely-feared agency it is today. But there is one thing each of us can do to keep them off our back: Keep Records! (I know, a bit lame … but it’s true!)

Our best defense against audits and false accusations is keeping accurate, detailed records of the flow of all money into and out of our lives.
Now, depending on your situation, this can be complicated and time-consuming! Where do you begin?

A great place to start is by calling our office; we can help you determine where to focus your record-keeping efforts, and help you develop a strong wall of defense around the “castle” of your finances. Generally, the better and more accurate your records, the better your chances are for surviving an All-Out IRS Battle!

Financial Advisor Richmond
Financial Planner Richmond
Financial Planners Virginia

Through the burger-soaked haze of my morning, I’m sitting down to write to you about something important.

But before I get there and speaking of burgers, how WAS your weekend? I sure hope it was restful. We business owners don’t enjoy the government-mandated holidays, but at the same time, sometimes the best policy really is: “If you can’t beat ‘em, join ‘em”! we took Monday off too

There’s a couple beautiful things about Memorial Day, in my humble opinion:

1) Summer is here.
The pools open, the shorts become a permanent staple and even the flip flops begin to make an appearance. For us, around here, we spend a lot of time in our summers sitting down with families to conduct careful analyses of their tax situation — BEFORE the winter strikes, and our moves become much more limited. This is called “tax planning,” and it’s an essential move, if you want to get the maximum tax savings possible.

2) Memorial Day reminds us that our current struggles have been overcome.
With all of the chaos in our current events (tornadoes, Mideast turmoil, government debt, etc.), it’s important to remember that even just one or two generations ago, our nation faced much worse–and prevailed. The “sacrifices” we may be forced to make in the midst of a bad economy are nothing compared to the rationing and privation of the WWII generation. And the young men and women who have served overseas in the past decade or so could also give us a good lesson in what REAL need looks like.

It’s right that we honor their triumph, and for many thousands of families — their deep sacrifice.

–

Too many clients (almost all of them) wait until the winter before they look at their tax obligations. Even worse, they wait until that season before they speak with their professional in any kind of proactive way.

That’s a problem, and it could be costing you some serious savings.

Here’s an example:

Let’s say that you were considering taking money out of a pension (401k) to finance the down payment on a house. It’s quite a common maneuver. But let’s say next that you do this withOUT discussing it ahead of time with a professional. That could be a four (or five) figure mistake.

If you were to come into our offices before such a move, I would ask you a few easy, but very important questions, and then (depending on the answer) likely advise you to first roll the money ($10,000) into a Traditional IRA. You could then withdraw the money at a savings of $1,000.00. 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.

Would you be pleased by that move? I’d guess “yes”, especially if you knew about other clients I know of who failed to plan. This couple just learned of the $41,000.00 penalty they had to pay for doing the same thing, but from their 401k.

Ouch.

There is no guarantee that you will save by speaking to us in advance. But this I CAN guarantee: If you don’t speak with us, we won’t be able to save you a dime.

Financial Planner Richmond
Financial Advisor Richmond
Financial Planners Virginia