Could There Be a Mistake? We Can Fix It.

"If you don’t like the road you’re walking, start paving another one."
- Dolly Parton

As I write this on Monday morning, we’re all pretty distracted by the news of the capture and death of Osama bin Laden. It’s a bipartisan moment of gratification — even if it does mean celebrating the death of another human being. In this case, the world may actually be a better place right now.

All that aside, I wanted you to know that we’re starting to pick the pace up around here, after the intensity of the end of our busy season. This is the time of year when we reach out to non-clients and business owners, who are looking for real assistance in managing their tax burdens and finances.

It is, after all, what we do best.

Yes, shutting those doors at the end of the day two weeks ago (the 18th) was sweet. My staff and I could look back on months of hard work, and take real satisfaction in hard work and a bunch of new client relationships which we’re excited to see last for years.

"But…what now?"

That’s a good question–and it takes me back to our offseason preparation. Sure, we’ve taken some well-deserved rest around here … but we NEVER "shut the door" on our relationship with YOU!

That’s why we’ll continue to be here for you for all of your tax and financial needs. If you’re new to us this year…you’ll soon find out that we make a big deal around here of keeping in touch, and offering you hope and wisdom about the current state of the economy–and YOUR wallet!

So this week’s Strategy Note, in fact, deals with a topic which most taxpayers have no idea about.

Roger Menden’s
"Real World" Personal Strategy
Yes, You Can Still Find Deductions
As a client of mine, you’ve already got the peace-of-mind that you were able to claim every possible deduction legally allowed in the tax code for 2010. We put each return through an extensive review process to ensure to ensure you keep as much of your hard-earned income as the IRS allows.

But what about your friends?

Well, since it’s now AFTER April 18th, they might think that the proverbial "fat lady" has sung on their 2010 returns. Not so.

Did you know that according to a report issued by the General Accounting Office, taxpayers overpay the IRS almost $950 million every year, which equates to an average overpayment of $400 per taxpayer. That’s a somewhat dated report…and the current numbers are certain to be higher.

What’s worse is that folks who prepared their own taxes (with a software, or on their own) are the most vulnerable. But did you also know that taxpayers who used one of the "big chain" preparers are almost as bad off?

An excerpt from a more RECENT report from the GAO: In a Limited Study, Chain Preparers Made Serious Errors

In GAO (United States Government Accountability Office) visits to chain preparers, paid preparers often prepared returns that were incorrect, with tax consequences that were sometimes significant. Some of the most serious problems involved these preparers…

   1.  Not reporting business income in 10 of 19 cases;
   2.  Failing to take the most advantageous postsecondary education tax benefit in 3 out of the 9 applicable cases; and
   3. Failing to itemize deductions at all or failing to claim all available deductions in 7 out of the 9 applicable cases.

More clippings from the report:
    * The 19 paid preparers we visited arrived at the correct refund amount only twice. On 5 returns, all for the plumber, they understated our refund amount by a total of $3,465.
    * All 19 of our visits to tax return preparers affiliated with chains showed problems. Nearly all of the returns prepared for us were incorrect to some degree, and several of the preparers gave us very bad tax advice, particularly when it came to reporting non-W-2 business income. Only 2 of 19 tax returns showed the correct refund amount, and in both of those visits the paid preparer made mistakes that did not affect the final refund amount.

So what can your friends do about this? Simple: file an "Amended" Return.

Many tax businesses don’t provide this service, but even though we’ve completed our clients’ returns, we WILL review any of your friends’ returns–at no charge.

To You and Your Family’s Peace of Mind!

Refunds & UN-Automating Your Life

Success is not measured by what you accomplish but by the opposition you have encountered, and the courage with which you have maintained the struggle against overwhelming odds.
- Orison Swett Marden

Last week, I posted my Note about automating your investment savings. After posting it, I did some more thinking about the whole notion of automating our lives, and I realized that there are some times when "automation", as such, can actually HINDER our financial growth.

Call it the hidden costs of convenience. And, in my opinion, it’s quite real.

But before I get to that, a few tax-related items:
1) Your Refund Status: Make sure you have a copy of your tax return on hand or know your "filing status", SSN and the exact dollar amount of the anticipated refund.
* Online: Go to IRS.gov and click on "Where’s My Refund". (http://www.irs.gov/individuals/article/0,,id=96596,00.html?portlet=4)
* Automated Phone: Call 1-800-829-4477 24 hours a day, 7 days a week for automated refund information.
* In-Person Phone: Call 1-800-829-1954 during the hours shown in your IRS form instructions.

2) "Do I need to keep a copy of my return?"
Yes, for a *minimum* of three years. There’s all kinds of contexts where it’s useful. We do keep one on file, on your behalf, but it’s just smart and safe for you to keep one in a secure place at home. (I’ll soon have a Note about Amended Returns, and you will need a copy for that process, as well.)

As for the supporting documents from your return, anything that relates to a home purchase or sale, stock transactions, retirement, business or rental property, should be kept much longer than the three years.

Now … I have a humble suggestion for you this week, and as always, I’d love your thoughts!

Roger Menden’s
"Real World" Personal Strategy
The Benefits of De-Automating Your Personal Finances
Small business owners know what it is to write checks for quarterly taxes, and, I believe, they have deeper sense for what they are paying, as a result.

In fact, I think our country would be a different place if everyone had to write a personal check and send in their taxes like this. When people really see what they pay (or don’t pay) I think they would feel differently about their tax burden!

This is a common refrain among certain political observers — but it has me thinking about what it might mean for YOUR family…

In fact, this is part of the genius of financial guru Dave Ramsey’s "envelope system" for family budgeting (whereby you place cash into specified envelopes, and pay only as much cash as remains in the envelope for different budget categories). "Automating away" our obligations can lull us into financial slumber.

Which is why I now propose that you REMOVE automation from certain checks that you write each month. (Again, this is aside from automated savings, as discussed last week.)

[But a word of caution: The only danger to this approach is that you run the risk of focusing too much on scrimping pennies. I certainly advocate wise budgeting, but it's important to remember that thinking over much about saving money can constrict your mind away from important "risks", which can often be worth taking -- like starting that business, making a new investment, etc. Don't let this technique keep you from expanding your financial mindset!]

So, a few suggestions for what you might DE-automate:
1) Just once, receive your paycheck in cash (instead of ACH’d), or cash the full amount when you receive it. Because, have you ever HELD one paycheck’s worth of money before?  It’s really hard to fully comprehend how much you’re bringing in until you physically feel those stacks of $20s in your hand.  I can guarantee you it’s a lot harder to spend it when you’re seeing it in person rather than online.  And it hurts frittering it away more, too.

2) Paying your mortgage manually. Feel the burn of this large check, every time you write it. It will trickle into how you think about the other bills which you pay such that even if this is the only bill you take off of "auto-pay", you’ll be wiser with your remaining funds each month.

3) Only purchase vehicles for cash. If you had to pay outright, wouldn’t you end up with a cheaper car?  Probably. Just because many are used to setting up loans and payments for vehicles, does NOT mean it’s wise — in fact, this is one of the primary markers for the "quiet millionaires" (those who are getting ahead financially, even on relatively smaller salaries). Yes, your pride might suffer when you’re not rolling around in a 2011 Lexus … but considering the real cost of that pride-booster does wonders for ameliorating your egotistic tendencies.

In short, paying in cash (or with a manual check) helps you to consider the following questions:

* Is this ____ still WORTH it?
* Is there a way I can cut it down a bit?
* What’s the best way to pay for it right now? (c/c, check, cash?)

Again, some of this could literally take seconds, but the point of it all is that you STOP to do it. With automation, you don’t get the "ping" every month because it’s already doing the thinking for you.  You’ll learn a LOT more about the financial "you" this way than you would otherwise, I’m certain. It’s really about paying closer attention.

Enjoying the slowdown around our offices, but still thinking of YOU!

A Simple Tweak, Which Can Really Help

You have to see opportunity before you can seize it.
- Greg Hickman

I think this week’s Note can really help every one of my clients and contacts. I’m excited for you to read it.

But as I write, it’s tax day (Monday, April 18th), and we are pushing hard during this final stretch! Procrastinators are streaming through our doors (after all, we welcome them here), the phone is ringing off the hook, and my email inbox is overflowing.

Another year, another tax day.

So, here’s my confession: I didn’t write the below article this morning. I hope you’ll forgive my lack of timeliness. But I *did* prepare it earlier, because I KNEW that today wouldn’t allow me to. However, I’m a pretty decent planner, so I had this one all set up and ready.

That said… I’m quite proud of this one, and I think you’re going to really enjoy it. It’s admittedly a little on the technical side–but I really believe it’s worth your time to read and consider. Would love your thoughts on it!

Roger Menden’s
"Real World" Personal Strategy
Automatic Investing As The Basis For Real Wealth
Yes, it may be a cliche, but the greatest engine to generate real wealth is saving and investing. And the best way to ensure that your default is saving & investing is to automate the process. Pay yourself first, and your savings will grow exponentially.
 
Effective money management is based on the idea that very small changes can yield enormous gains in your family’s finances. This process, both easy and simple, is worth millions. Unfortunately, only a tiny percentage of American families take advantage of the tools available to implement this automated technique.
 
So here’s how you pull this off:  Have all income flow into a joint taxable investment account. Make saving and investing your default. Putting all of your money in this account helps ensure that you move only the money intended for some other purpose into a different account.
 
For working families, this means an automatic deposit of paychecks into their joint account. Banks will try to entice you into setting up automatic payroll deposit into their checking account. They will offer you additional interest if you do so. Resist. The additional interest is not worth the failure to not only save but to save and invest. Your taxable investment account should be the default.
 
For retired families, this means an automatic deposit of Social Security checks. It also means their required minimum distributions (RMDs) from their individual retirement accounts (IRAs) should be deposited first into this account.
 
From this account you can then withdraw what you need for daily expenses. Do this by setting up a regular transfer of funds from your joint investment account to your checking account. Make sure the transfer matches the amount you have allocated in your budget, ideally 65% or less of what you need to support your lifestyle. The other 35% should remain in your joint taxable account, much of it to be invested.
 
Part of what remains is the 10% you have designated for "unknown unknowns". In the ideal world, this money will not be needed, but few families can anticipate every possible expense. Each stage of life presents new challenges. Having the financial margin to absorb some of life’s shocks is simple wisdom and offers financial peace of mind.
 
Because the time horizon for this emergency money is unknown, invest it in a balanced portfolio. If unused, your emergency money will double in 7 to 10 years and provide a greater safety net for your family. If you have to dip into this fund, keep track of the amount. If it approaches the full 10% every year, you are using your emergency money to extend your budget, not simply for unanticipated expenses.

The less you use this account, the more quickly you will reach financial independence. These funds are mixed with your other taxable investment savings and continue to grow your net worth. If you are meeting all of your expenses without any major surprises, these funds can be used to purchase a home, start a business or for additional charitable giving.
 
Another portion of what remains in your taxable investment account will be the 5% you are specifically designating as taxable savings. Because this 5% gets mixed in with charitable giving that is being invested and your unknown expenses, the entire portfolio should be balanced. If an emergency arises, any portion of the portfolio could be sold to furnish the needed funds. Similarly, when you want to gift appreciated stock, any portion of the portfolio could be gifted.
 
The last portion might be the 10% for funding your retirement accounts each year. Many people put this money directly into a retirement account as part of the payroll process through a pretax deduction. If that is the situation, you don’t need to flow anything through your taxable investment account. But you may want or need to fund your retirement outside of a payroll deduction. One example is funding your Roth IRA each year. In this case you may want to collect the money in your taxable investment account and then transfer it to a Roth account.
 
If you want to fund a Roth IRA account for the maximum $5,000 (in TY2011), you could transfer the entire amount once during the year or set up a monthly transfer of $416.66. The money from your paycheck would provide the cash, either letting it build up throughout the year or supply the funds for each month’s transfer.
 
Busy people forget to make the necessary transfers each year. That’s why a monthly transfer is preferable. Saving and investing should be automated so it occurs regularly without any additional effort. Whatever is in your checking account you are likely to spend. Whatever is in your investments you are less likely to spend.
 
Automating the process of saving and investing is like damming a river to form a reservoir. The alternative is the manual process of hauling buckets of water from your stream to a water tower. You will never grow rich by hauling buckets, and it’s much harder work.
 
No matter what income you have, you probably already have enough to grow rich! Saving and investing just $10 a day builds a million dollars over your working career at average market returns. You build wealth by what you save and invest, not by what you spend. Automating the process of saving and investing grows your wealth while you sleep.

Sending you our affection, through a haze of tax forms!

Thoughts During Our Final Week

The ability to concentrate and to use your time well is everything if you want to succeed in business–or almost anywhere else for that matter.
- Lee Iacocca

I’m writing this on Monday morning, the 11th, and our offices are buzzing!

Next Monday will be no different — it’s the federal deadline, after all, and we always get panicked phone calls from people on that day. There is still time for us to do an excellent job for you or for your friends, as of this writing, but the window is closing rapidly.

So, I have a solution for you in this week’s Post … but before I get to that, a couple quick points:
1) The averted government shutdown means that refunds will NOT be delayed — more than normal, that is. If you’re curious about the status of yours, go here:
http://www.irs.gov/individuals/article/0,,id=96596,00.html

2) Tomorrow (Tuesday) is "Tax Freedom Day", which is calculated each year by the non-partisan Tax Foundation (if the government *had* shut down, it would be even later!). Here’s that information, if you’re interested: http://www.taxfoundation.org/taxfreedomday/. One of the fun little facts:

Americans will pay more in taxes in 2011 than they will spend on groceries, clothing and shelter combined.

Which, of course, is why I and my staff are here: keeping your tax bill as low as legally and ethically possible.

And, of course, we can always do this …

Roger Menden’s
"Real World" Personal Strategy
Extensions, Explained
Let’s clear some things up with some facts about getting an "extension".

As you know, this upcoming Monday, April 18, is the filing deadline for a federal tax return.  If you need more time to get your paperwork complete, you need to file (or have us file on your behalf) this form…
http://www.irs.gov/pub/irs-pdf/f4868.pdf

…with the IRS by the end of the day on the 18th.  This gives you an automatic six-month (until October 17, 2011) extension of time to file. 

Here’s the deal: An "Extension of Time to File" is not an "Extension of Time to Pay", unfortunately. The Extension simply gives you an automatic six months of additional time to get your paperwork together and file that return.  But, if you owe more than what you paid with your estimate, you’ll be accumulating penalties and interest on the difference–so PLEASE don’t take the entire six months to do this!

So, when filing your "Extension of Time to File", you’ll need to estimate what you think you owe to the IRS.  This should not be pulling numbers out of thin air (or other various body parts)!  You’ll still need to go through your receipts and tax documents and get them "somewhat" organized. 

From here, you can estimate both your income and your expenses, and then approximate what you owe Uncle Sam.  Keep in mind that this is an ESTIMATE.  And, you’ll have to pay what you estimate you owe at the time we file for the extension.
 
You can do this all electronically through our office, you can mail in the form WITH estimated payment (must be postmarked by the 18th), or you can call a specialized provider and pay by credit card. We can provide you with the appropriate number to call.

To You and Your Family’s Peace of Mind!

I’ll Get To It Sometime

The future depends on what we do in the present.
- Mahatma Gandhi

No, I’m not talking about your tax return! (Certain clients who’ve met with us in the past few weeks may have had a stab of panic over that subject line.)

But come on — haven’t we all uttered that magical phrase, capable of assuaging all our fears, and brilliantly putting off tomorrow what could have been put off today?

I’m talking to you, Mr. [or Mrs.] Procrastinator.

Yet do not fear! I’m not here to browbeat, I’m not here to scold … instead, I’m here to offer hope.

And, for those of you who have NOT procrastinated, I’m here to offer you the chance to help your friends by having them come see us ASAP! Even at this late hour, we gladly receive friends of our existing clients — we make a special point to accommodate clients’ friends, because we’ve discovered that our great clients have very good taste in friends!
   
And, a few words for the possibly-panicked procrastinators in our midst this week…

Roger Menden’s
"Real World" Personal Strategy
Good Procrastination
Right now, there are an infinite number of things you could be doing. No matter what you work on, you’re not working on everything else. So the question is not how to avoid procrastination, but how to procrastinate well.

In my view, there are three kinds of procrastination. Depending on what you do instead of working on something, you could work on:
(a) nothing,
(b) something less important, or
(c) something more important.

That last type, I’d say, is good procrastination.

This is the "absent-minded professor" who forgets to shave, or eat, or even perhaps look where he’s going while he’s thinking about some interesting question. His mind is absent from the everyday world because it’s hard at work in another.

That’s the sense in which the most impressive people I know are all procrastinators. They’re type-C procrastinators: they put off working on small stuff to work on big stuff.

What’s "small stuff?" Roughly, work that has zero chance of being mentioned in your obituary. It’s hard to say at the time what will turn out to be your best work (will it be your thesis for your PhD, or that detective thriller you worked on at night?), but there’s a whole class of tasks you can safely rule out: shaving, doing your laundry, cleaning the house, writing thank-you notes-anything that might be called an errand.

Good procrastination is avoiding errands to do real work.

Good in a sense, at least. The people who want you to do the errands won’t think it’s good. But you probably have to annoy them if you want to get any real work done. The mildest seeming people, if they want to do real work, all have a certain degree of ruthlessness when it comes to avoiding errands.

Some errands, like replying to emails, go away if you ignore them (perhaps taking friends with them). Others, like mowing the lawn, or filing your tax returns, only get worse if you put them off. In principle, it shouldn’t work to put off the second kind of errand. You’re going to have to do whatever it is eventually. Why not (as past-due notices are always saying) do it now?

The reason it pays to put off even those errands is that real work needs two things errands don’t: big chunks of time, and the right mood. If you get inspired by some project, it can be a net win to blow off everything you were supposed to do for the next few days to work on it. Yes, those errands may cost you more time when you finally get around to them. But if you get a lot done during those few days, you will be net more productive.

So here’s where we come in.

Consider us "The Ultimate Procrastination Solution".

Allow us to take the pain away from these second-level tasks (like getting your return filed) — and you go back to writing that killer novel.

To You and Your Family In This Tax Season!

Posting This Again

“I’d rather regret the things I’ve done than regret the things I haven’t done.”

- Lucille Ball

Well, last week I departed from my normal area of expertise, and wrote a real-world guide on preparing your family and home for a true disaster. Got lots of feedback — thank you!

But, I thought I should re-enter the fray of my primary task: ensuring you and your family don’t face an IRS disaster! And, since we’re nearing the home stretch in tax season, with the deadline for individuals (April 18th) just under a month out, we’ve been “packing them in” around here!

But this is something we still get asked about every day!

However, before I get there, I did want to say that one of the main reasons we love tax season around here is that we get to sit down with such incredible people. I’ve truly been reminded of how grateful I am for our clients–and for your trust in us during these “unusual” times.

We’re getting notes around here more and more often as people pass around my Strategy Notes to their friends. People seem to hunger for real world hope. I’m glad to be able to say that there *is* reason for anticipating a recovery in our future, but that whatever comes, my staff and I will be here to walk you through the storms.

So, onward with the answer to our most commonly-asked question around now!

Roger Menden’s

“Real World” Personal Strategy

Your Tax-Time Checklist!

In early January, I wrote a “checklist”, and it was one of our most popular messages. I guess it was handy!

Putting together this list may run slightly counter to my business goals–after all, we do get paid to do this on behalf of clients! That said, our mission is to ensure that EVERYONE in the area saves the most possible when the IRS comes calling! Some of these may seem small, but trust me when I say that they add up.

So…even if for some strange reason you won’t be using our cost-effective services this year, and because we’re getting so close to April 18th, here it is again for you: what you’ll need to prepare your taxes…

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

While some of these statements, and their ensuing deductions may seem like “pocket change”…just a few minutes of effort can pay a nice hourly rate! And, better in YOUR pockets than in Uncle Sam’s, right?

So, I hope this helps!

The Japan Disaster And You

He who loses wealth loses much; he who loses a friend loses more; but he that loses his courage loses all.
- Miguel De Cervantes

It’s deja vu all over again, with another massive earthquake coming during tax time this year. Last year, it was Haiti … this year, of course, it’s Japan.

The fallout (if you’ll forgive that term, not intended as an insensitive pun) has been radically different for each event — but, as was the case with the Haitian earthquake, the real problems and ramifications for everyone are yet to be seen … but what *is* clear is that many lives have been lost, and many more have been radically altered.

So, how have you been processing this one?

Last year, I was struck by how different my daily existence was, from the devastation wrought in Haiti. The same is true here … but I must confess to feeling (at least at first) some "disaster fatigue" setting in.

It seems that the world has spawned disaster after disaster over the last year.

But that doesn’t mean we turn away. No, this is the time where we actually need to "press in" a little, and care.

(So, as an aside, I’d also be interested to find out if you have located an effective place to send donations–the big organizations spend so much money on "overhead", that (as I mentioned about this time last year, for Haiti) I find it difficult to believe I’d get the most "bang for my buck" in donating to them (as we unfortunately saw with Hurricane Katrina). Any thoughts?)

So, rather than my normal tax or financial fare this week, I have something different. I’ve stopped apologizing for being such an obsessive planner … it sort of pays to be that way, in my profession, after all! This week, I wanted to remind you of what we almost never think about during "good" times: How to prepare your family for "grid-failure" emergencies.

This isn’t an area of extensive expertise for me, but it’s so important, I did some research, and have a good framework for you to consider… (after the jump)

Roger Menden’s
"Real World" Personal Strategy
How To Prepare Now For a "Japan-Type" Disaster
With the images of devastation we’ve been seeing, in addition to being moved for those who are currently experiencing all this, I’ve been reminded how important having a plan really is.

This is true for finances (a tax plan, an estate plan, etc. – let us know if you need to set one of those up! 952-445-8753), and it’s equally true for a big disaster.

We can be so complacent about the security of our daily existence, that an event like this seems unrealistic. But, we’re getting continued reminders, every year, at how fragile our modern world truly can be.

But that doesn’t mean you have to panic.

No, with a few basic points of preparation, you and your family could be vastly more prepared than your neighbors, even giving you the opportunity to be ones who can support and assist your neighbors, rather than have to *ask* for support.

There are three primary areas where you need to be prepared:
1)    Energy/Power/Heat
2)    Water & Food
3)    Family

1) Energy: However unlikely a massive grid failure might seem now, it’s important that you at least think through what you and your family would do about heating your home during the winter (wood stove? indoor propane heater? burning your furniture?), and/or cooling your home during the summer (which may not be quite as critical).

Additionally, consider what parts of your existence are dependent on power, and what it would be like to live without it. Write down your plan.

2) Food & Water: For water and food, it’s a very good idea to have food and water for at least 3 days on hand, and in permanent storage. Typically, you need about a gallon of water, per person, per day … and non-perishable food is now so readily-available, that you have your pick for how to stock up. You can save water in a leech-proof plastic jug and just switch it out every 5 years.

3) Family Plan:
* Identify meeting places where you and your family would come together, in the event of some sort of catastrophic grid failure or event, in which you aren’t able to stay at home.
* Put together a "Go Bag" for your family, which carries critical supplies and information for whatever circumstance you may run across. Here is what your bag should include …
•    A disaster plan including location of emergency centers, rallying points, possible evacuation routes, etc.
•    Positive Identification, such as drivers license, state I.D. card, or social security card
•    Enough medicine to last an extended evacuation period
•    Cash and change, as electronic banking transactions may not be available during the initial period following an emergency or evacuation
•    A first aid kit
•    Fire starting tool (e.g., matches, ferrocerium rod, lighter, etc.)
•    Professional emergency literature explaining what to do in various types of disaster, studied and understood before the actual disaster but kept for reference
•    Maps and travel information
•    Standard camping equipment, including sanitation supplies
•    Weather-appropriate clothing (e.g., poncho, headwear, gloves, etc.)
•    Bedding items such as sleeping bags and blankets
•    Medical records
•    Pet, child, and elderly care needs
•    Battery- or crank-operated Radio
•    Lighting (battery- or crank-operated flashlight, glow sticks)
•    Firearms and appropriate ammunition
•    Fixed-blade and folding knife
•    Duct Tape and rope/para-cord
•    Plastic tarps for shelter and water collection
•    Slingshot, pellet gun, blowgun or other small game hunting equipment
•    Wire for binding and animal traps

This all might seem a bit excessive now … but so does every disaster plan — until disaster actually strikes.

So, perhaps make it a fun family activity to work through setting up these plans, and you’ll sleep much better knowing you’re prepared!

To you and your family’s safety!

A Friendly Tip (Not About Taxes)

“It is well to give when asked, but it is better to give unasked.”

- Kahlil Gibran

Last Monday, there was a certain holiday to attend to,

and it’s pretty easy to let things sort of slide on by after

that point. But here’s my advice for you:

Don’t stop there.

Yes, yes — the old canard: EVERY day is Valentine’s Day!

And I’m very aware that you may have had a budget

for your expressions of love, so I’m taking a different approach.

These are some non-budget-busting ways to go “above and beyond” –

when it matters. Sure, wives may 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!

You see, how nice would it be to have “come through” last week

(or, well, not, as the case may be), but then follow up with

something more?

And again, I know that many families on my list have a certain

amount of means at their disposal, and others don’t. Which

makes this list even more helpful. Because *whatever* your budget,

the simple gesture of coming back around AFTER Valentine’s Day

is how real magic happens.

So, yes — today’s Note is not about taxes, per se … but as part of my

continuing quest to serve you “above and beyond”, I thought I’d offer

you a friendly reminder.

[But, on that note: Have you contacted us yet to get your taxes

in order? Because our schedule is rapidly filling up. Oh, and we

do generously reward for referrals, so send your friends our way! Just

have them let us know you sent them, and we'll give them a special

deal -- just from you.]

Roger Menden’s

“Real World” Personal Strategy

Making Your Love Gestures Stick

It’s no secret that our economy is in tough shape. And whatever your particular financial situation, wouldn’t it be great to create romance “magic” without spending an arm and two legs? So, perhaps you’ve done the old “flowers, candy and chocolate” routine already last week. Well,  here are a few modest and occasionally tongue-in-cheek suggestions for a sizzling follow-through … that won’t torch your wallet!

Be Green – Save Money and the Environment at the Same Time!

With the economy taking its toll on virtually every industry, even the high-rollers are looking for ways to spend their cash more effectively. One Hollywood studio saved $40,000 on cards and postage by doing e-Cards and videos for all of their clients and friends.

Seem cheap?  Spin it this way – you’re being green by not using snail mail – that’s so 20th century anyway. You’re keeping with the times, utilizing powerful technology and reducing your “footprint” at the same time! What environmentally-conscious woman could resist?!

Make a Video.

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

Learn a Romantic Song and Sing it to Your Sweetheart.

Well, I’m no singer, so I can’t say I’ve tried this … but I hear it works well. Even better, if you can’t sing, your more-than-a-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 artistically and/or musically 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 a service like Apple’s iBook service and iPhoto.

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. 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!

Just remember … follow-through is everything!

Teaching Your Children Well

“The self is not something ready-made, but something in continuous formation through choice of action.”

- John Dewey

We do love children around here. So much of what we do, in the tax preparation process, influences families, children, and their futures — well, it’s simply a huge part of our clients’ lives, and we take it very seriously.

However … I’ve been around the block, once or twice, with families whose children have gotten themselves in financial hot water, and it’s not always an easy task to get them out.

So, this week, I’m taking some time to offer you some lessons “from the trenches” on helping your children launch into the real financial world with a firm foundation.

But before I get to that, I wanted to remind you:

You should have received your W-2’s by now, but in case you haven’t, here is a good resource for you:

http://www.bankrate.com/finance/money-guides/what-to-do-if-you-don-t-get-your-w-28-116632.aspx

So now, to raising your children’s financial future …

Roger Menden’s

“Real World” Personal Strategy

How To Raise Financially-Savvy Children

I’ll spare you the stories, but needless to say: I’ve seen so many otherwise-loving and wise parents somehow forget to ready their children for the financial realities of adult life. Instead, they simply hand them credit cards, pack up their cars and head to school.

I’ll go out on a limb here, but I believe that it is this deficiency in financial education which has led, in part, to an adult population that spends beyond its means, engages in unsafe borrowing practices, and accumulates record amounts of  debt.

Still, if we decide to instruct our kids how to responsibly manage their money — much as we teach them how to read, tie their shoes, and ride bikes — then perhaps they might avoid a Great Recession-like event in their own adult lives.

Sure, that all sounds good in theory, but how do you go about instilling proper financial values into your children?

1) Tackle the task as if you are once again teaching your kids to ride bikes. You first need to let them get comfortable on training wheels, and prepaid cards are the training wheels of personal finance. So co-sign for prepaid cards, load a certain amount of money biweekly and allow your children to spend freely. This will force them to learn how to budget and, since most prepaid cards allow online account management, you will be able to review their purchases with them.

By the way, I did some online searching, and these are some good choices for pre-paid cards for teenagers, etc.

Visa UPside: http://www.upsidevisa.com

MasterCard Facecard: http://www.facecard.com

American Express Pass: http://bit.ly/heWJRS (shortened link)

Visa Buxx: http://usa.visa.com/personal/cards/prepaid/visa_buxx.html

2) Once you are confident that your kids have exhibited responsible prepaid card use for at least a year, you can graduate to monthly cash allowances. This progression, which is tantamount to taking one training wheel off their bikes, will provide them with greater financial independence (given that you cannot monitor their spending with cash). It will also more thoroughly test their responsibility because the odds of losing money or exhausting too quickly are heightened with a monthly cash allowance.

3) If your kids demonstrate the requisite discipline after a year of cash allowances, you can take the other training wheel off. Do so by co-signing for and opening checking accounts in their names and depositing slightly higher monthly amounts while requiring them to pay for more of their own expenses.

With checking accounts, children will garner much needed experience writing checks and purchasing with debit cards. They’ll learn how to avoid overdrawing their accounts and bouncing checks –  and if they can’t learn these lessons quickly enough, you can screw that training wheel back on and regress to cash spending. After all, when you took that last training wheel off, you didn’t let go of the bike completely! You still had a grip on the handlebars and were providing assistance as needed.

4) If your kids’ financial balance seems solid after 6-9 months, you can release the handlebars and either co-sign for student credit cards or give them small lines of credit as authorized users on your credit card accounts. Doing so will help teach them the principles of responsible credit use, such as spending within one’s means and paying bills in full each month. Remember though that you are simply taking your hands off to see if your kids can ride. If they wobble, catch them.

This financial education progression will instill within your children various skill sets that will surely serve them well when they leave the nest. It’s important to employ such a practical approach because it lets kids learn and inevitably falter while the stakes are low. Additionally, you can ensure that your children know how to handle their money before becoming independent, providing yourself with the kind of peace of mind that is valuable to any parent.

So before sending your kids out into the world, make sure they are ready for the financial implications of that independence!

To your family’s financial and emotional peace!

Clearing The Fog Of Common Mistakes

Derive happiness in oneself from a good day’s work, from illuminating the fog that surrounds us.

- Henri Matisse

This is the time of year, during which we get to do exactly what Monsieur Matisse, up there, advises.

We clear the fog of the (unnecessarily, in my opinion) burdensome pile of forms and regulations which form our tax process. Yes, some people get paid to create tasty food, others to patrol our streets … and we, well we put out financial and regulatory fires.

And it can be a lot of fun — really! There are stories every year, which circulate around our office, about the grateful client who was utterly hopeless about their financial and tax situation … until they met with us, we crunched their forms and numbers, and not only gave them the nice news of a lower tax bill (or higher refund) than they expected — but that we were able to speak into the overall situation of their finances.

But for some strange reason, many taxpayers STILL choose to “go it alone” when it comes to preparing their returns.

Well, far be it from me to have such hardy souls be left in the dark. While what I’m writing this week may seem “professionally risky”, we are sincere about wanting everyone in the area to pay the least amount in taxes possible.

So, even though it might encourage some people towards the risks of software-powered self-preparation, instead of our cost-effective, quick-but-meticulous services … here is a list of the most common errors I see when I review self-prepared returns.

(Warning: There’s no “app” for experience.)

Roger Menden’s

“Real World” Personal Strategy

Most Common Self-Preparation Tax Errors

As all of your information is coming into your mailbox this month to prepare for your taxes (Doctor’s bills, old W-2’s, interest statements for student loans, etc.), it can be tempting (to some folks, at least) to forego the  perceived “expense” of using a professional to help you save on your taxes for the year.

So, if you decide to go down that lonely road, please do at least watch out for these common errors which we routinely correct for those who have us review their previous-year returns:

* Filing the wrong status (dependent or independent, 0 instead of 1, etc.)

* Missing forms

* Forgetting to sign it (this is incredibly common! Make SURE you sign!)

* Not adhering to new laws (a biggie)

* Math errors or mixing up numbers

* Standardized deduction (one lump sum) when itemizing may return more

* Forgetting earned interest

* Not claiming your charitable donations (more common than you’d think!)

* Incorrect social security numbers

* Missing the deadlines

* Not checking last year’s taxes to see if anything carries over (again, very common — and a good reason to have a pro check it out)

* Not taking deductions where they’re pertinent (IRA’s, too much Social Security being taken out)

* Failing to include dependents who don’t live with you

* Claiming someone as a dependent who claimed themselves as independent

* Not filing domestic or self-employment taxes

* Not claiming credits where they’re due (Child Tax Credit, Earned Income Credit)

So what can you do to correct all of these errors?

1) Double check. And triple check. Then check again. The idea here is that when another pair of eyes look at it, they can see stuff you don’t. Your mind will tell you that things that you write or calculate are correct, even if they aren’t.

2) Go to a professional. Self-serving? Why, yes. But as I mentioned in my introduction, we get paid to know what we do, and following the tax code permutations is our J-O-B. We’ve seen so many tax returns, even already this year, that what would take you 12 hours — can be accomplished by me and my practiced team in one.

I’m not suggesting we never make mistakes … but can you really afford to skimp when thousands are on the line?

To your family’s financial and emotional peace!

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