Notify past employers, unemployment and loan companies of any address and mailing changes. One forgotten W2 after you file your original return means amendment fees and tax liability. Generally I see this range from $49 to $350. When you amend Federal you need to amend state, which can also add more charges!
Sometimes in our hurry to get taxes done and out of the way we forget about the 6 weeks of unemployment in January for construction or a temporary holiday job that paid out wages in January for hours worked in December.
In preparation for possibly selling my house, I sorted and purged my Christmas decorations.
Did I really haul that around through at least six moves and every year up & down steps?!? Carrying all those boxes?
It is amazing how I mindlessly chose to spend my energy.
- Emotional energy – storing ornaments that meant nothing emotionally and then being overwhelmed by too much that my precious ones didn’t even get put on the tree. (My tree had zero ornaments this year.)
- Physical energy – Just thinking about how long I’ve had the excess and remembering where I lived when I bought it. Oh man, how much energy I could have saved if I hadn’t moved it and packed it.
- Financial energy – There was some I bought but not much. Most of the ones I am donating were gifts (Really were more emotional energy – because I felt bad just because they were a gift! )
Five boxes and a giant Christmas tree REDUCED TO two boxes and a small tree. 12 feet of floor space REDUCED TO 3 feet of floor space.
I had kept my mom’s old tree and her cardboard ornament box from when I was little. I am 53. Really!?! 50 years!?! Yes, it was time to release that energy back into the world.
The things I kept had a theme. Three small pieces from my childhood and the rest were memories that the boys and I made after I healed from the divorce. They support me, make me smile and remind me that I created a good family.
Going forward I feel empowered. I am storing my boys’ best memories instead of drowning in feelings of what could have or should have been.
(PS – yes, the “snow” under the tree is just pillow stuffing that the dog destroyed the other day – lol)
My good intentions of getting back on track blogging are off a day. But my intention to check my bank account every morning is still On!
I feel it is a gift to myself to stay on top of my own finances. I have a tendency to push it aside and pretend it doesn’t exist, which I kind of wish it didn’t. The people who say their partner handles all the money, used to make me crazy, but I guess that means me too. Somehow, the magic money fairy will fix my money issues.
So no magic money fairy means I must do it myself.
For Christmas I bought myself a new Franklin Covey planner with the financial pages. I had great success with it last year but that planner got promoted to the work planner. Now I have a cute hot pink polka-dot planner that is 100% devoted to my money.
I’m hoping the action of self-care, energy & cute bring me more success in my personal finances this year.
Make plans for your tax appointment today. Do it yourself? Put a date in your planner.
E-file opens January 23. This means that the IRS will not process any returns (even paper filed returns) until this date.
My personal goals has always been the last day of January. I have online access to the forms I need so they come out quicker than the mail. If you have investments – the forms FINAL VERSION are not ready until March. Please don’t bring your tax preparer the former that says NOT FINAL 😉
This week work on getting your small business in order. Mileage logs, inventory, spreadsheets with income and expenses.
Yesterday I had 3 clients make me their LAST phone call. They explained how they had talked to friends, asked lawyers and searched the interweb looking for answers. Why was I the last call? Tax preparers know money. Especially the client’s money.
In all the cases I pulled up their prior year returns as practice and played out different scenarios. I explained complicated forms (that software makes easy!) and we worked out several possible solutions.
Each time they asked how much do they owe me? Nothing, I said. You don’t just buy my services once a year, financial planning and advice are part of professional tax preparation. There is a reason why it’s expensive! I am the LAST phone call you need to make.
Who do you call for financial advice?
If you are not filing sales tax for your small business, do you know why? Most states have a filter in place that matches filing a Schedule C and a state sales tax account. If the two don’t match you will get a letter.Some categories of work have both taxable and non-taxable servces, such as a cleaning service.
In case of a letter audit I gather my proof ahead of time. I start on the state’s website and print my reference. Then I always follow up with a phone call to the state sales tax department and record the date, time and person who gave me the advice. Almost every time, I have misinterpreted the simplified version that is on their website.
Unless the state claims you are exempt from filing, you may still not owe tax, but may need to file a zero amount sales tax return. This matches the non-taxable transactions that occur with your Schedule C tax form amounts. It is uncommon to not pay sales tax, so do a little research if you haven’t been paying sales tax.
A long time client has chosen to give Power of Attorney to his bank. He had been the man who helped everyone else who aged, get organised and get to their tax appointment.
Other clients come in solo, even though they are in a relationship. I always remind them what if something happens to you? Auto pays don’t end with death.
One of my good friend’s husband was terminal, she had time to start the process of collecting his passwords for the electric, water, mortgage, medical insurance, etc. The ones she didn’t have when he died was his phone and email passwords.
Which one are you? If you are single, do you have a fireproof safety box with logins & passwords and have given a family member the key? Who will help you? What would you need to know if someone close to you couldn’t take care of their bills?
- My mother has my brother and I on every account, just in case.
- In my firebox I keep my credit card info sheets that says if there is an accident while flying and I bought my tickets with their card, there is life insurance money. (Read that small print!) My mom has a key – though she may not remember where she put it!
- My email passwords are written down & stored in the firebox.
- When I create a new account, Food 52, King Arthur Flour, Netflix, Utilities, Cell phone, I write the log in and password in an email to myself with the subject line the name of the company. When I get the email I save and archive it. When I (or someone who needs to help me) needs the info they just need to do a search of my email and there it is.
Take a quiet Saturday afternoon and think through some of this. How prepared are you?
These quests are really working for me And my boys are on board because they have less chores too! I am down from 7 loads of dishes to 2. My laundry is one load a day, no more no less, and I am only responsible for 3 of those days. This has created so much free time. I’m loving it!
This next quest not only frees up time but also mental energy. For some reason I feel like a failure if I’m not cleaning something every day. Even when I had cleaning ladies it took hours! I looked at what I actually was doing – reactionary cleaning. If the house had a showing or my family was coming to stay I panicked. My new approach ( with the assistance of dishes & laundry off my plate) is to do as little as possible but just enough to not panic for a house showing.
Here’s the plan:
- Monday – Clean out a drawer
- Tuesday – Fix something
- Wednesday – Car chores
- Thursday – Sort some photos
- Friday – Pick up house & wipe Kitchen counters
- Saturday – Dust, Vacuum & Bathrooms
- Sunday – Nails
I know your thinking, what is nails? But in a home with boys, it’s a constant job to remind them to clip their nails! Plus – for me it’s a reminder to change my polish color and do a little mani/pedi for my self-care.
I am going to use a method from Money Love by Meadow DeVor. When I have income or expense I’m writing if it comes from a place of abundance, neutrality or scarcity.
What I’m hoping to gain from this, is how to create love of money instead of fear.
This week I spent all my $100 eary and I am out of gas. I made a bad decision at the grocery store and today I am feeling regret that I can’t leave the house. (I could, but I am choosing to feel this instead of fudging my own rules.) It’s time to respect myself and stop lying that I can afford it.
Get a separate checkbook for your business. It’s not even an option.
In an audit, if you have combined personal money with business money, the auditors have the authority to
- Throw out the business.
- Throw out all expenses for the business.
- And the worst one I have dealt with – The auditor took all income, including birthday money as income and tried to tax the client.
To go back years and try to separate what was personal and business is extremely difficult. Audits typically do not happen for the current year but are three years back. Do you remember what happened in 2012 tax year?
One of these factors is the bank statements.So many of us, never check them anymore. An email comes saying it’s available, but who opens them and goes to the work of downloading the PDF. We tend to use our app to track daily balances. In audits I have had clients pay hundreds of dollars to the banks to have them printed. Tax auditors can subpoena them for free and do NOT have to share them.
In an audit, all deposits are income, so if you are re-depositing a bad check, have an insurance reimbursement or loan proceeds, clearly marked them and have a paper trail. In one case a client sold a home and they temporarily put the proceeds in their business account. The auditor taxed them until they could produce the correct paper work.
Keep your business checkbook separate, clearly mark deposits and download or print the bank statements.