The Neal Group, LLC

Milwaukee Accountant On: “Taking The Mountain Off Your Back”

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 13 Feb 2012 14:16:44 +0000

So, the White House released its budget projections for the 2013 fiscal year (which starts in October) (a rundown from Bloomberg here: http://bloom.bg/waLvtc) — and what strikes me first about it is that government economics are pretty different from household economics!

For instance, in this budget, the money "saved" from fighting the wars in Iraq and Afghanistan — which was being borrowed, mind you — is now being allocated to other spending. But it’s being counted as savings! That’s like borrowing money to make your car payments, selling the car, CONTINUING to borrow the money and spending it on a 2nd mortgage.

And counting it as savings.

Borrowing money to pay off more borrowed money (and calling it savings) only works for Uncle Sam, apparently.

So, this is the perfect time for me to finally bring to you what I had worked up for you about unique debt-reduction strategies for Milwaukee-area households and businesses.

By the way, I’m a big fan of automation — but not in all instances. Do NOT "automate" your tax preparation process with off-the-shelf software. Especially of the "free" variety. We have to clean up so many mistakes made by these products (and their users!), that I cannot, in good conscience, recommend them.

Yes, I’m obviously biased. But the facts are the facts. Take a gander at this, for just one small example: http://www.customerservicescoreboard.com/TurboTax

In the meantime, let me know if you have any pressing tax issues or questions! We exist to serve you! 414-325-2040.

The Six Best Ways To Beat Credit Card Debt for Milwaukee Families
The national average credit card balance for 2011 was $6,576, down from $7,404 the previous year — and while it’s certainly nice to see improvement, I also know that any kind of debt can feel like you have Justin Tuck climbing on your back. (That’s a New York Giants reference, by the way. Google him if you must. Not a small man.)

So, you may be in a better situation … it may also be worse. So, to answer the questions we often get around here from clients facing tough times, I’ve put together a step-by-step process which we often help people work through. But as I’ve said before, feel free to call us at: 414-325-2040 for more customized advice.

1. If you ever hope to pay off your credit card debt, pay more than the minimum payment each month.
If you only pay the minimum payment each month, your bill could continue to INCREASE, even if you completely stop using your card. This is called "negative amortization"–where you think you are paying on your debt but the additional fees and finance charges are more than the minimum payment. The bottom line is: Pay more than your minimum or you will eventually be in debt over your head.

2. Implement a regular *system* for credit card debt reduction.
With online banking and automatic payment options, there are GREAT tools for ensuring you don’t mess up because of administrative chaos. If you feel you can’t manage all your bills by pen and paper, there are several good software programs available for keeping track of your financial records.

In fact, I recommend that you automate a payment ABOVE the minimum monthly payment, just to be certain that you start getting ahead of the game. Those minimum payments are rigged against you, and the only way to get ahead is to … get ahead. I have some more thoughts on automation in a moment.

3. You can negotiate with your credit card company.
No, you do not need to be an attorney or other professional to negotiate with your credit card company (you will need patience and persistence though). The rising amount of consumer debt in this country has made creditors realize that they need to be more understanding of their customers — if they hope to get any money back. If you file bankruptcy they are only going to get pennies on the dollar, so they are willing to make deals.

4. Write letters to each of your creditors acknowledging your debt and the situation, and tell each one when you can begin repayment.
Open communication always helps. Usually credit card companies get ignored and end up sending delinquent files to a collections agency. So they’ll actually appreciate your openness in contacting them and may be more understanding of your situation. Proactively dealing with your debt problem rather than hiding will not only help your financial problem but make you feel better about yourself.

5. Keep track of what you are able to pay each creditor every month.
If you are not able to pay the full amount of your credit each month, you still should still pay something to stay on top of it. You should work off a written budget so you know exactly where you stand. Some experts suggest that you divide your monthly debt budget by the percentage each bill makes of the total and pay that amount.

Here’s an example: If you owe a total of $1,000, and one credit card is $800 and the other is $200, and you only have $100 available to pay for that month… You should pay $80 on the $800 balance, and $20 on the $200 balance. This way you are reducing each debt by the same percentage.

6. Don’t fall prey to intimidation tactics
No matter how forthcoming and honest you are, some creditors have been taught to be mean and downright nasty. Hang in there and don’t let this tactic intimidate you.

Lastly–don’t let the IRS be one of those creditors. Let us help you this tax season, and THAT will be one less creditor to worry about, I assure you!

A Penny-Pinching Tax Professional’s Guide To Romance

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 06 Feb 2012 14:23:25 +0000

What is it with the Giants and acrobatic catches? Five years ago, it was David Tyree … and this year, Mario Manningham comes through with the game-changing catch on the Giants final drive. Enough has been said about the game — but even though I’m not a Giants fan, what I loved about their victory is how even though they had a sub-par regular season, they simply didn’t give up.

There’s plenty inspiration in there for all of us, methinks. It’s not over until, well, it’s really over.

Well, as I mentioned last week, I’ve put together a primer on automating and leveraging tools in order to get out of debt, but once again — events are getting ahead of me. Because Valentine’s Day is hurtling towards us, and I thought I’d give you a little “nudge”.

But, since I am a tax professional, after all — I’m going to give you some romance tips “on a budget”! Wives can scoff at this list, and be gratified when their husbands successfully surpass it. And husbands, well I know some are skilled at romance; and others … well, here’s some help!

Even better, for some of our clients who are doing just fine, thank you, this is actually a great list for you too … after all, the best gestures are from the heart, not necessarily the wallet.

Love Without Spending In Milwaukee
A Penny-Pinching Milwaukee-Area Tax Professional’s Guide To Creating Romance
Look– whatever your particular financial situation, wouldn’t it be great to create romance “magic” without spending an arm and two legs? So, instead of the tired old “flowers, candy and chocolate” [boring!], here’s a few modest and occasionally tongue-in-cheek suggestions for a sizzling Valentines … that won’t torch your wallet!

Make a Video.
You can use the video setting on your phone or digital camera, and create a heartfelt message of love for your sweetie. Then, post it to YouTube, Vimeo or another online video-sharing site and send it on! Um, just be sure to make that video setting to “private” unless you want to share with the world your dying love for your honey.

Learn a Romantic Song and Sing it to Your Sweetheart.
Even better, if you can’t sing, your valentine will give you kudos for the effort! You could step it up by writing an original song and then sing it. Or, for the slightly-less courageous, you could pull a page out of John Cusack’s book in Say Anything and hold a boombox (or iPod) above your head and blare Peter Gabriel’s “In Your Eyes”. That seemed to work.

Not a singer? More of a writer? Or artist? For the otherwise artistically inclined:

- You could pen a poem on nice paper
- or even paint it
- You can paint a picture of your honey. Just be sure it looks good.

The “Mix Tape” (or Playlist)
This is an old standby of high school kids everywhere. Except these days, the “tape” part is a bit less convenient. Instead, make a CD or mp3 playlist of Sweet Love Songs and make a cover list/ liner notes on the memories of you and your honey from the songs. And you can make a Personalized Photo Album using Shutterfly or a service like it.

Romantic Picnic
Surprise your love with a ‘picnic’ in the park, at the beach, or any other outdoor nature spot. If the weather isn’t ideal for outdoors, you could bring the outdoors inside — find a fake palm tree, flowers, sand, beach umbrella, radio, towels (borrow them). Nothing says “I love you” like fake palm trees!

Write a Message To Be “Stumbled Upon”
Well, perhaps not *literally* stumbled upon, but try a nice outdoor surprise. If you do have snow outside, you could stomp out the message and fill in the letters with spray paint or flower pedals or rocks. If there’s no snow, you can use sidewalk chalk to write a message to your sweetie.

You see, anybody can go out and “buy something” – but it takes effort and thoughtfulness to make it personal … and it doesn’t require a lot of money! And as someone whose JOB it is to save Milwaukee taxpayers money, that’s what I like.

Please feel free to call with tax questions [414-325-2040] or email me and my staff. Just because we’re busy, doesn’t mean we don’t care!

“Your W2 Is Missing, And What You Should Do” Milwaukee Accountant Advises

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 30 Jan 2012 14:00:01 +0000

"Until you make peace with who you are, you’ll never be content with what you have." -Doris Mortman

Anyway, tax season is really starting to heat up! Make sure that if you have any pressing questions about pulling your file together, that you send me a quick email (yes, I will STILL respond!), and/or give us a call: 414-325-2040

I’ve put together a primer on automating and leveraging tools in order to get out of debt but, before I get there, today, as I write on Monday, it’s the second-to-last day which organizations can mail W-2′s without facing consequences (you might not *receive* all of them by tomorrow, just so you understand).

Unfortunately, these consequences don’t often carry much teeth for employers and sometimes HR departments or very small businesses don’t get their act together (probably because someone competent isn’t helping them! –ahem–), and … the W-2′s take a while.

(Here’s a link to concise information about what happens on the business owner side of things: http://smallbusiness.chron.com/happens-dont-make-w2-deadline-employees-15702.html)

If you haven’t gotten your W-2 by the end of next week, here are some basic steps for you (you might want to print out or save this post, by the way):

1) Contact your payroll department/boss. Be nice about it — after all, they’re just as burdened by the paperwork junk as you are!

2) If, however, the days roll by and the form is indeed lost or your employer is inordinately slow in issuing a replacement, or you worked for a company that went out of business and there’s no one to bug about getting a W-2 … what then?

"Make" your own! Well, actually, you contact the IRS at this number: (800) 829-1040 with the following info from your last paystub handy:

Year’s wages.
Payroll taxes withheld.
Federal and state income taxes withheld.
Contributions to your company retirement/401(k) plan.
Employer’s tax identification number.

Wait on hold, and ask for Form 4852. Basically, this will inform your employer "officially" that they’re delinquent, and you can even use this form in a pinch, if your employer never gets their act together.

Well, I’ve gotten this far in this post and I realize that I’ve run out of space to go into my debt-defeating strategies for you. You’ll have to tune in next week, when I break it down in the "Real World", as they say.

Until then: please feel free to call [414-325-2040] or email me and my team. Just because we’re busy, doesn’t mean we don’t care!

“Those Little Mistakes Will Be Your Undoing” Milwaukee Accountant Reports

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 23 Jan 2012 14:55:15 +0000

"Failure doesn’t kill you … it increases your desire to make something happen." – Kevin Costner

As I write this, there are a bunch of tears in Baltimore and San Francisco.

If you’re not a football fan — let me briefly tell you why: Sunday, in Baltimore, a game-tying "gimme" field goal went wide left, and in San Francisco a fumble and another small error (the ball grazing the leg of a player) were largely responsible for an overtime loss. So New England and New York (Giants) are headed to Indy for the Super Bowl.

Little hinges swing big doors, as they say.

Our offices are starting to get pretty busy. Last week, the IRS began accepting e-filed returns (for which they save $3.10 each, which adds up) and we’re getting a bunch of emails and phone calls (414-325-2040, by the way) with little questions.

It’s smart to ask the little questions. Because this year, the IRS will be scrutinizing returns in unprecedented ways — and they pay careful attention to those "little" things.

As you know, I don’t always write about taxes in my weekly Notes — in fact, I make a point to put these together differently than all those other accountants who spit out pre-heated leftovers to their clients in the form of canned "tax tips" and useless content. But this time of year is when many of my clients and contacts are figuring out exactly how they’ll be pulling together their tax file … and, well, it’s a pretty important decision. I want to speak to it while there’s time to help.

So, here’s what I mean…

Jon Neal’s
"Real World" Personal Strategy

The IRS is Paying Close Attention
Think tax evasion is a small problem? The Tax Justice Network released a report at the end of 2011 which showed that tax evasion amounts to $337.3 billion per year in the US. Yes, that’s billion with a "B".

This was based on numbers from 1999 to 2006, and is probably even higher in recent years, as the weak economy may have led more people to hide money from the government. As an example, the average tax refund decreased by $100 in 2011 — perhaps people are reporting less income in order to keep more of their money.

Now, it’s hard for us wrap our heads around how much money that really is. Here’s a way to do so: Recently, Congress was unable to agree on a plan which would reduce the national deficit by $1 trillion over 10 years. Over that same time period, tax evasion will cost us well over $3.3 trillion.

Given my profession, perhaps it’s obvious that I’m a big proponent of everyone following the tax rules. When we don’t, it means that everyone else has to pick up the slack. And the consequences of all of this reporting about tax fraud is greater scrutiny on honest taxpayers, and higher tax rates.

The IRS is Catching More Tax Evaders
The "good" news is that the IRS is doing a better job of catching people who aren’t paying their fair share of taxes. Fraud investigations increased by 14% in 2010, while prosecution recommendations (cases that the IRS thinks should be brought to court) increased 18% and convictions increased by 4%.

Again, it’s possible that some of these increases are due to the economic situation of the past few years, but the fact that the IRS decreased its investigation time by nearly 40 days is a sign that the IRS is doing a better job.

Don’t Give In To The Pressure; Avoid Taxes — LEGALLY
Here’s what you should understand — the rise in tax evasion means that the IRS is continuing to increase its scrutiny on every return. But that doesn’t mean you have to give up the fight! There are innumerable LEGAL ways to avoid paying too much in taxes. And, unfortunately, software programs and fly-by-night tax shops don’t do a very good job of proactively seeking them out for you.

But perhaps you know someone who does?

“This Is Self-Serving, But It Needs To Be Said” Milwaukee Accountant Reports

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 16 Jan 2012 14:12:25 +0000

"The most important thing in communication is hearing what isn’t said." – Peter F. Drucker

As I wrote a couple weeks ago, the start of the year is pretty important, in my opinion. And the LAST thing you need is to be stressed over finances.

Yet that’s, unfortunately, how many families start their year, this year.

So, is there anything we can do to help? Yes, we live to help you with your taxes, but what truly animates me and my team is the fact that assisting real families (like yours) can make a difference — not just in your "bottom line", but in the peace by which you operate. That’s, really, why we do what we do.

So, do let us know if there’s anything at all we can help you with: 414-325-2040

Indeed — we’re getting very close to the point where we begin to see many folks walk through our doors with their tax information in hand.

Well, today my message runs a significant risk of being extremely self-serving. I get that, but I want you to know that isn’t why I’m writing it. Sure — I want my business to do well, and that happens when our clients keep using our services and refer their family and friends our way.

But I’m writing this today to give you a warning about some new options available to taxpayers, which haven’t always been there. I hope you hear what I have to say, and that you take it to heart.

Jon Neal’s
"Real World" Personal Strategy

Hidden Problems In Popular Tax Filing Options
For various liability issues, I’m loathe to actually mention this company by name, but let’s say (for the purposes of this conversation) that there’s a big, popular company who made its fortune on the backs of lower-income taxpayers called H&P Black (a name picked completely at random). This company is flooding the airwaves with a brand new program offering "free" tax preparation.

Maybe you’ve heard about it? Well, like many such things, there are, shall we say … strings.

First of all, here are the restrictions: it only covers those filing the 1040EZ federal form, which covers only the very simplest tax issues. It can’t be used by anyone who has dependents, makes more than $100,000 per year, is age 65 or older, claims adjustment to income like alimony or tuition deductions, or itemizes deductions. Thus, homeowners who deduct mortgage interest or people with large charitable contributions can’t use the 1040EZ.

Plus, filers have to pay fees for state tax preparation and any other fees incurred — which have a tendency to pile up.

Asked by stock investors why [said company] was doing this, an executive replied: "Our ability to monetize this program means a minimal impact on our net average charge," [said company] Retail Tax President Phil Mazzini told analysts on Dec. 7. (source)

It’s always enlightening to look at executive interactions with stock analysts to see why public companies do what they do, I’ve found.

So — in summary: don’t be seduced by the siren call of getting something for nothing. You usually end up paying for it, in a whole host of ways.

In fact, one of OUR revenue centers over the years has always been in fixing the mistakes made by these "big box" retail tax outfits and off-the-shelf software programs, and discovering loads of missed opportunities and overpayments.

(Because, speaking of software: do you remember when our current Treasury Secretary used the leading tax software to do HIS taxes, unintentionally created a bunch of errors with it, and then blamed it for all of his tax problems in front of the Senate? Not an uncommon issue, I’m afraid.)

The old adage *is* an adage because it’s so often true: you get what you pay for. It’s the foundation for a stable economic system because it’s almost always true.

This List Will Help You

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 09 Jan 2012 14:22:20 +0000

"A daily routine built on good habits and disciplines separates the most successful among us from everyone else." – Darren Hardy

Last week I wrote about financial resolutions — and, well, John Tierney of the New York Times must be a reader!

The columnist devoted a fantastic column to the keeping of resolutions and though he didn’t name me directly, he made a bunch of great points. I read this in the paper version, but I wanted you to see it online. In my opinion, here’s the key bit (my emphasis):

The study, led by Wilhelm Hofmann of the University of Chicago, showed that the people with the best self-control, paradoxically, are the ones who use their willpower less often. Instead of fending off one urge after another, these people set up their lives to minimize temptations. They play offense, not defense, using their willpower in advance so that they avoid crises, conserve their energy and outsource as much self-control as they can.

Alright — so perhaps he’s not talking about the automation and financial resolutions which I discussed! But I do hope you noticed what I emphasized there: sometimes our best method to stick to our resolutions is to not rely on our simple willpower — but to outsource it.

I’m running down some tools for you on this for next week, which I hope will help.

In the meantime (and speaking of outsourcing)… I truly do pity those who attempt to wade through all of the different tax codes and forms on their own, and not devote a week’s labor to the transaction. It really doesn’t pay to "go it alone" for certain tasks.

So, for those of you who want our help, I’ve put together a handy little list of what you’ll need to bring in. There may be certain situations where we’ll need other documentation to get you even more deductions. But, of course, we’ll let you know about that, should the situation arise!

Let me know your thoughts … and, of course, if you’d like to talk this over with us we’re here for you!

Jon Neal’s
"Real World" Personal Strategy
Neal’s Tax Time Document Chase List
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!

++++++++

To your family’s financial and emotional peace…

Milwaukee Accountant On: “My Financial Resolutions”

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 02 Jan 2012 14:36:22 +0000

"It is in your moments of decision that your destiny is shaped."
- Anthony Robbins

This first full week of the year is often cited as one of the most difficult and depressing weeks of the year. Far from shiny newness, experts say that with all of the let-down after the holidays, coming back to work, or leaving behind family, can bring a heightened sense of loss. That, combined with the fact that we’re staring at 2-4 months still left of winter (depending what part of the country you call home, of course–we have clients and friends reading this from across the country)…

Well, it can be a tough week.

So, I thought we would lighten the load for you in two ways:

Firstly, I was sent this extremely funny short video the other day. Now that the holiday season is over, what better than to laugh at it? We just got bombarded with a ton of "Top __ of 2011" lists, but I’m not sure this video was on any of them. If you want a quick pick-you-up, here’s a funny prank pulled on helpless Target employees on Black Friday last: http://www.youtube.com/watch?feature&v=CYbVpAwGGGs
Check it out, then you will want to come right back to me when you’re done.

Alright, funny time over. The second way I’d like to lighten your 2012 load is by giving you some simple, actionable guidance on FINANCIAL resolutions which are easy (and profitable) for you to keep.

You see, I hope you don’t mind that I see it as my role in your life to not only provide authoritative and actionable tax advice for your specific situation, but also to play a role as a "coach" for your finances, and even your mindset.

This is why our clients and their friends seek us out for *more* than simple tax preparation, but a whole host of other services as well–from planning, to business services, to simple encouragement. I get to be someone in your life who says: "You can do this. You’re not alone."

It’s my great hope that our relationship will continue to grow into 2012, and beyond. And not just for "business purposes". We love our clients — you’re like family to us (the *good* kind of family, that is)!

So, with my coach hat firmly in place, here are some thoughts for effectively creating and pursuing your personal financial goals, as we move into 2012…

Jon Neal’s
"Real World" Personal Strategy

Neal’s Financial Resolutions for 2012
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. However, I’m going to leave you with these for now, and come back to this again in the weeks ahead.

Happy New Year!

This Is The Last Week …

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 26 Dec 2011 14:19:09 +0000

"Life consists not in holding good cards but in playing those you hold well."
- Josh Billings

I woke up Monday morning, after the wonderful holiday weekend … and I had a realization: after today, there are only FIVE days left in 2011.

Perhaps not a genius realization — fine. BUT, if you’re smart about how you handle these days, you can pay yourself quite well, when tax time rolls around.

The VERY good news is that we’ve been able to clear out three "FAST ACTION" appointment slots this week only for clients and friends who are committed to following our advice quickly, and who want ensure that their tax bill for the 2011 tax year is the lowest it can possibly be.

There are a veritable slew of beneficial tax provisions which are expiring on Saturday night, and some of them can still be leveraged. And with the payroll tax cut deal being struck, there aren’t any last-minute shenanigans from Congress for all of us to worry about!

For a list of them (some of which is technical, but it’s all pretty clear), see here:
http://www.journalofaccountancy.com/Web/20114945.htm

Email me to snag a Fast-Action Appointment, or call: (414) 325-2040 — and may I suggest you do it quickly? These slots are sure to go fast. After that point, you’ll be put on a short waiting list.

But for those of my clients and friends who prefer to "do it yourself" (though with THIS tax code, I’m not sure that’s always wise), I’ve put together a brief, and actionable "checklist" to ensure that you’re squeezing every last drop out of the deductions available to you for 2011.

And, on the early note — let me wish you a premature Happy New Year, 2012!

Now, let’s get deducting…shall we?

Jon Neal’s
"Real World" Personal Strategy
Ultra Last-Minute Tax Moves for 2011
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).

Do you have others you want to explore? Give us a call (414) 325-2040 or shoot me an email, and we’ll help you out.

Best to you! We’d love to see your family THRIVE in 2012!

“My Holiday Prayer” Milwaukee Accountant Explains

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 19 Dec 2011 14:41:23 +0000

"People travel to wonder at the height of the mountains, at the huge waves of the seas, at the long course of the rivers, at the vast compass of the ocean, at the circular motion of the stars, and yet they pass by themselves without wondering." -St. Augustine

It seems that every year around this time we tax professionals cast our gimlet eyes on Congress, and wait for them to resolve their year-end business — which ALWAYS affects our work.

Well, ho ho ho … this year is no different! As of this writing we’re seeing the payroll tax cut (worth up to $1K for many working families) be batted around. (A news article on it: http://on.wsj.com/sEufja )

We’ll keep you posted with the relevant details, as well as other, hopefully-pertinent information (you never know, with Congress!).

Anyway, I came in to the office this morning, and I noticed that traffic is already a little "lighter" around town. Many of us are still working, but I know of plenty of folks who have already taken time away from work, starting today.

Whatever your faith background, it’s hard to ignore the holiday clamor. In my opinion, it’s a crying shame that a season of reflection and prayer (Christmas, Hanukkah, etc) would become transformed into something so… busy. It’s almost as if we now have to rush around to "purchase" or artificially create nostalgic moments, when they would happen on their own before.

Now look — as a proud business owner, I’ve got no problem with people earning money during this season…I just wonder when it’s time to say "enough"?

But enough holiday ranting. This week, while everyone else is attempting to slow down, we tax professionals are gearing up. I thought I would take a break from my usual "financial" strategy tips, for the holidays, and pause a moment for reflection with you.

Because as I’ve been meeting with tax clients in getting ready for the season, I’ve discovered that many of you are worried and stressed–about finances, family, personal circumstances, etc. It’s not my job to save the world on your behalf of course, but I do get to be somebody in your world that can encourage you to slow down, take a breather and keep your perspective on what’s really important.

Thanks for your friendship, and for your business in 2011 … we’re looking forward to working with you in 2012!

This week’s Note is to help us all keep perspective, this week…and into next year.

Jon Neal’s
"Real World" Personal Strategy

A Holiday Prayer For All Of Us
"God, help us remember that the jerk who cut us off in traffic last night is a single mother who worked nine hours that day and is rushing home to cook dinner, help with homework, do the laundry and spend a few precious moments with her children.

"Help us to remember that the pierced, tattooed, disinterested young man who can’t make change correctly is a worried 19-year-old college student, balancing his apprehension over final exams with his fear of not getting his student loans for next semester.

"Remind us, Lord, that the scary-looking bum, begging for money in the same spot every day (who really ought to get a job!) is a slave to addictions that we can only imagine in our worst nightmares…

"Help us to remember that the old couple walking annoyingly slow through the store aisles and blocking our shopping progress are savoring this moment, knowing that, based on the biopsy report she got back last week, this will be the last year that they go shopping together.

"Father, remind us each day that, of all the gifts you give us, the greatest gift is love. It is not enough to share that love with those we hold dear. Open our hearts not to just those who are close to us, but to all humanity. Let us be slow to judge and quick to forgive, show patience, empathy and love. "

Amen.

Best to you! May your season be truly bright.

Milwaukee Accountant: “I’m A Myth-Buster”

Milwaukee Accountant, Jon Neal, CPA MST PFS — Mon, 12 Dec 2011 14:51:58 +0000

"If you love life, don’t waste time, for time is what life is made up of." – Bruce Lee

Scattershooting around the tax world while simultaneously preparing for a sure-to-be-busier tax season (thanks for all the recent referrals — keep ‘em coming!) AND navigating the perils of another holiday season … well, it means one busy Jon!

Seriously, we’re getting excited about what is our most intense season of the year — TAX time. In between cookies and egg nog, we’re brushing up on all of the official tax law changes, and meeting with clients for last-minute tax-planning.

A few quick tax items for you, in fact, before I get to the good stuff:

IRS might have some refund $$ for you: There’s $153 million unclaimed right now. So, if you were expecting a refund check and fear it might have been returned to the IRS as undeliverable, go to the IRS website (www.irs.gov) and use the "Where’s My Refund?" tool. This will give you the status of your refund. In some cases, it will also provide "instructions on how to resolve delivery problems." You can also can get a phone version of "Where’s My Refund" at (800) 829-1954.

A friendly reminder: Use those FSA funds in the next few weeks … or lose ‘em! No explanation necessary, methinks.

Lastly — we have a couple last-minute tax planning appointments available! If you want to ensure that we’re maximizing your assets for MINIMUM tax liability, a phone or in-person meeting will make it happen. Shoot me an email, or give us a call: 414-325-2040

Now… on to something which might just serve as a friendly nudge: "Tax time" is the perfect time for you to get other, long-delayed financial tasks accomplished. One of these is the dreaded estate plan. This is something which every family should have in place — not just the 1% (if you will). In fact, there are some myths about preparing estate plans which I thought we should deconstruct together, today.

(And as I mentioned — preparing to set up one of these plans is much easier in the context of what you normally do in preparing for tax season … so, let us know how we can help you with it!)

Jon Neal’s
"Real World" Personal Strategy

Two Common Estate Plan Myths — BUSTED
As of this writing, it’s a fact that almost 60% of Americans don’t have a basic will, and that’s a big problem.

One of the big reasons that most families don’t yet have this kind of plan in place is because of some incorrect thinking about whether it’s right for them, or if it’s even necessary. And sure –some people just haven’t gotten around to creating a will or trust. Others think they don’t need an estate plan because they’re not "rich".

But here’s the problem–if you continue without an estate plan, you could leave a legacy of bad feelings and attorneys’ fees.

So I wanted to speak to some of the more common misconceptions out there. I’ll start with a couple big ones this week, and when the time is right, address a few more in 2012…

MYTH #1: Only rich people prepare estate plans.
Do you own ANYTHING? Because if so, you need a will. You see, a will allows you to designate who will receive your property should anything happen. Continuing without one ensures that your assets will be distributed under the terms of your state’s "intestate succession" laws. That means your money and property could end up with family members you haven’t spoken to in years, instead of who you’d really like to see control your assets.

I won’t go into all of the different components of a will, trust, health care directive etc., as my purpose here is to emphasize that failing to plan is simply a decision to trust your assets to government bureaucrats who don’t know you from Adam.

Even if you think your situation is pretty straightforward, you may feel more comfortable hiring a lawyer to guide you through the process.

MYTH #2: Everything goes to your spouse, if something happens.
Unfortunately, that’s not always the case. We deal with clients from different states around the country, and state laws vary. In fact, in most states, if you continue without a will (intestate), your inheritance will be divided among your spouse and your children. In New York, for example, when someone dies intestate, the spouse gets the first $50,000 of the estate and what’s left is divided 50-50 among the spouse and the children.

You can imagine how this could create all kinds of problems, particularly if your spouse was financially dependent on you or you have children from a previous marriage.

I’ll send a few more in the future, but I hope you can already see that things are not always as we "think". And let’s take advantage of tax season and move towards getting this done (or updated) in 2012!

I hope this helps! To your family’s financial and emotional peace…