There are so many different messages coming out of DC, per the media, that if you try to make sense of it all through the mass media lens, then you’re bound to work at cross purposes with yourself.

There’s the Republican health care bill, and the current version of the bill is dominating political headlines.

Or, of course, there’s the initial budget being proposed by President Trump which is sure to make certain sectors, of my client base pretty happy.

Then again, there are the war drums being banged (once again) from North Korea …

Happy Spring, everyone!

But truly, if you subject yourself to media hysteria, you will make 1) poor financial decisions (because things ALWAYS change) and 2) you will remain in a state of continuous frustration and anger — because that’s what the media feeds on, no matter the political tilt.

I choose to “opt out” of the hysteria. While, of course, keeping my powder dry to respond to REAL issues in my life.

And YOU get the luxury of being able to trust that my staff and I are following all of the tax law changes as they come, and taking greatest possible advantage on your behalf.

Of course the tax law we’re currently using for return preparations has been “in the books” for quite some time now, so we’re not needing to make any rapid shifts these days. Just working the plan, and helping you save the most amount possible.

Speaking of savings… I see many IRAs set up this time of year, and of course, as we review our clients’ return information. But I also see some common mistakes, and I’d like to help you with those.

Let this be a “palate cleanser” from all the chaos, and let’s take a positive step towards saving WELL this week.

4 Very Common Mistakes Media, PA Investors Should Avoid When Opening An IRA
“Part of making good decisions is recognizing the poor decisions you’ve made and why they were poor.” -Warren Buffett

Opening an IRA for your retirement is almost always a good investment, but it’s not always a simple process. There are IRA alternatives (like a SEP, 401k, etc.)  that many of our clients know how to use (but you might not), there is the Roth option, and of course there are also the pitfalls that people fall into when setting them up. For example:

Not getting professional advice. 
Don’t try to do this on your own. Despite the many softwares, websites, etc. trying to lure you with the promise of saving money on commissions or other professional fees, those who work with a professional do tend to see better overall returns over time, for a number of reasons.  Not to mention the timely, expert advice they can provide when you need it — which you surely will from time to time.

If you are reading this post, whether as a client (or you’re considering still working with us) or someone passed it on to you, know that we are in your corner from the get-go for these sort of questions.

Naming the wrong beneficiaries, or not naming any at all. 
Making your minor child a beneficiary will require a court-appointed guardian to manage the money until the child turns 18. If you fail to name a beneficiary, it is likely the IRA will become payable to your estate upon your death. This unnecessarily subjects the IRA to estate taxes.

Confining yourself to the form. 
Most account agreements allow little space in which to name more than one beneficiary. With a little jiggering though (whether with an additional paper tacked to the initial paperwork, or by working the software a little) you can make sure to add the information of all beneficiaries, and exactly how you want the account to be distributed.

Thinking your financial institution keeps records of everything. 
In this age of mergers and acquisitions, who knows where your records could be? Keep copies of your account agreement and beneficiary designations, and let your professional and your family know how to find them.

And as I mentioned, we’re here to help. Let me know if you have any questions.

Warmly,

Jarrod Barton
(610) 285-9883
Senior Tax & Advisory Services

This past Sunday, the NCAA revealed the brackets for March Madness. The country will be inflicted with a particular form of hysteria these next few weeks, but unfortunately, this little national hoops holiday isn’t one which my staff and I get much chance to participate in. We’re too busy doing your taxes!

Yep, this is close to our busiest time of the year, and we’re working “like mad” (see what I did there?) to handle the increased volume this year. Because with all of the political chaos out there, it’s clear that people want real answers from someone who knows them — and cares.

But let me say this: though my business does well this time of year, I’d rather things were better and our tax code was simpler. I’d rather the economy was roaring and everyone felt confident enough to handle their own financial forms.

However, the sheer complexity of the tax code keeps me in business — to take the hassle away from you, and apply our expertise to your situation. But wouldn’t it be more efficient if paying taxes didn’t actually require so much expertise?

I know … a bit of a controversial statement from a tax accountant. But I get tired of seeing new clients bring last year’s tax returns to us–and realize that if we’d helped them sooner, they would have saved a bunch of money (fortunately, we *can* file amended returns!). If things were simpler, people would keep more of their money — and THAT’S one of my passions.

Now, I have some thoughts here that might feel a bit controversial. But I’d love your thoughts on it, and I read every note that comes my way.

Why You Should Consider Giving Away Your Tax Refund by Jarrod Barton
“If you do what you’ve always done, you’ll get what you’ve always gotten.”  -Tony Robbins

We have many clients who are receiving tax refunds this month, and that number of course will only be rising. So, here’s a thought for you: What would it look like for you to give your refund away?

Yes, this is a radical idea to think about, but consider: what does this tax refund represent to you?

If you’re like many families, it’s a bit like “found money” — i.e. an unexpected windfall. And, in those scenarios, it’s tempting to hoard it, or to splurge.

However, as with other windfall scenarios which I’ve written about in the past, one of the smartest things you can do is to give a portion (at least) of it away.

Why do I suggest this?

Well, I believe it’s actually enlightened self-interest in the long run. And not just in your sense of “feeling good”.

I see the balance sheets of people from every walk of life, and over the years I’ve noticed an interesting phenomenon: individuals and families who make giving a priority, even when they aren’t “wealthy”, seem to do better in the long run. And I mean financially — not just in their state of mind.

(Though, there are significant soul reasons for giving. Have you seen, as I have, that those who freely give seem to be more pleasant company?)

Before you write this off as being “ask the universe” mushiness, understand that 1) I don’t subscribe to that baloney and 2) I am merely reporting an observed phenomenon. Do with it what you will.

You see, I make it a point to observe how money works. And, for some reason — money gets attracted to those who aren’t merely in hot, desperate pursuit of it. It’s almost like it is in romance — potential lovers are usually turned off by the overly-aggressive seeker.

So consider this. I know it might feel painful. But trust me when I tell you that it can actually provide you with a deeper feeling of joy than if you choose to cling tightly to everything that comes your way.

I hope I didn’t ruffle your feathers … but if so, understand that most of all, we are here to walk with you no matter WHAT your balance sheets look like, or what you choose to do with it.

And lastly, we’re here to help. Let me know if you have any questions.

Warmly,

Jarrod Barton
(610) 285-9883
Senior Tax & Advisory Services

These days, I’m often glad that it’s our busy tax filing season, so that I have an easy excuse when political conversations are happening: Oh THAT [crazy new political story]? Huh, didn’t see it — I’m too busy with tax season.

With all of the chaos out there, the division and shouting — from Washington to Facebook to right here in Media, PA, it’s helpful to try to tune out the shouting and focus on what is actually in our sphere of productivity.

So speaking of being productive, it might be time to get moving on your tax files, if you haven’t already.

The IRS did a study a few years ago that computed that the *average* time that it takes to complete a tax return is 22 hours. And obviously, that number varies by the return, but I’m reminded (again) of the blessing that it is to free our clients’ TIME — not to mention the additional deductions we find, the stress we remove, and the security we can provide in knowing that it’s being handled right.

Already, we have many, many Media, PA tax clients who have filed, have received refunds and have written us notes telling us that they’ve never been more pleased with their filing experience. And of course, this makes me happy, as you might imagine.Now, I’ve got something here that we posted towards the beginning of January, but as we are moving into the depths of March, I thought it would be worth posting once more…

Jarrod Barton’s Tax Paperwork Checklist
“We are not retreating — we are advancing in another direction.” -Douglas MacArthur

With the increased penalties associated with the ACA in 2017, and all of the other changes every year, filing your taxes on your own is not for the faint of heart — even with nice-looking softwares on the market which purport to make it easy for you.

But that’s what we’re here for. Let us be your easy button.

Below is a list of what you will need during the tax preparation process. Not all of them will apply to you — probably MOST will not. Nonetheless, it’s a useful checklist.

Before you get overwhelmed: 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 Media, PA tax clients.  Really, this is for ensuring that we’re able to help you keep every dollar you can 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

Health Insurance Information
* All 1095-A Forms from marketplace providers (if you purchased insurance through a Marketplace)
* Existing plan information (policy numbers, etc.)
* If claiming an exemption, your unique Exemption Certificate Number
* Records of credits and/or advance payments received from the Premium Tax Credit (if claiming)

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’re here to help. Let me know if you have any questions.

Warmly,

Jarrod Barton
(610) 285-9883
Senior Tax & Advisory Services

It’s a hard world out there, for sure.

(You know it’s tough when they can’t even get the Best Picture award right at the Oscars!)

And for our young millennials, it sure seems like things are harder than they were when we were entering the workplace life.

If you haven’t already watched this, I highly encourage you to check out this video clip of best-selling author and thought leader, Simon Sinek, about the particular challenges faced by a generation of young people who have been raised in the world of Facebook, streaming video and instant communication:

https://www.youtube.com/watch?v=hER0Qp6QJNU

Sometimes our technology, which promised to make our lives better, carries a bunch of unintended consequences that we don’t see right away.

And sometimes, our love for our children can prevent them from growing in the way they need to, or from taking on the responsibilities that make for a fuller, more rewarding life.

I’ve seen this dynamic with a few clients, and so I thought I’d offer some tips on helping our younger ones move forward with more effectiveness.

And out of our basements!

Email me by clicking the email button in the upper-right corner of this page or call us ((610) 285-9883), and let’s get you on the calendar ASAP so that we can ensure you aren’t “lending” unnecessary money to Uncle Sam.]

Four Tips On Gently Encouraging Your College Graduate Living At Home To Independence by Jarrod Barton
“We believe in ordinary acts of bravery, in the courage that drives one person to stand up for another.” -Veronica Roth

If you’ve got a recent college graduate living at home, searching for his or her first “real” job, you know how difficult the job hunt can be these days. In the interest of getting your kids off the sofa and out of the house, here’s some of my advice…

1. Clean up the online profiles. Potential employers will check your new grad’s profile on Facebook and other social media sites. Advise your job-seekers to remove images and language that might give recruiters pause. Coach them on how to use sites like LinkedIn to create a more professional online persona.

2. Network. Your son or daughter might be tired of hearing, “It’s not what you know, it’s whom you know,” but it’s still true. If you have useful contacts, introduce your children. Otherwise, nudge them toward making an effort to connect with people in their chosen field, and advise them on how to act.

3. Work for free. This may seem counterintuitive when you want your children to start making money, but internships and volunteer work can teach them useful skills while introducing them to the world of work, and can bring them into contact with a wider range of networking contacts who may be able to help them in their fledgling careers. I can’t over emphasize how powerful this strategy can be, especially if your child wants to break into a difficult industry.

4.Update the wardrobe. Remind your kids that jeans and T-shirts won’t make the grade in most workplaces, especially when they’re interviewing there. Help them pick out some sophisticated, professional-looking outfits so they can go out into the world with style.

To your family’s lasting financial and emotional peace — including your grown children …

Warmly,

Jarrod Barton
(610) 285-9883
Senior Tax & Advisory Services

Every year around this time of year, the Treasury Department releases their list of the various shenanigans that criminals and the like try to pull around taxes. Obviously, this activity peaks around now, and so it’s a very good idea to be on your guard.

Last week, the IRS completed their 2020 IRS Scams list, and though it isn’t substantively different from last year’s list, the tactics within each category keep evolving. Fortunately, with us in your corner, you don’t need to worry much about these.

But readiness is always something I encourage. These shenanigans include different ways that perpetrators would want to steal your personal information, scam you out of money or talk you into engaging in questionable behavior with your taxes.

And before I explain about these (and how to guard against them), I also wanted to ask you a favor…

Would you leave us a review on Yelp or Google Maps for other potential clients to see? We have found that these sources can be so helpful for people evaluating their options, and we would love to have as much information there as possible. Thank you!

Now, onto those dirty dozen…

The Top 12 2020 IRS Scams by Jarrod Barton
“Don’t think or judge, just listen.” -Sarah Dessen

Scammers are creative … but not THAT creative. As I mentioned, this list is similar to the one from last year.

And if they were so smart, they’d be doing something real, instead of criminal.

But knowing what to look out for is only the first step. After I describe these, I’ll give you a quick rundown on how never to get taken in.

This is the list — presumably in the order of most common first, and in the order in which the IRS described them.

Phishing: This is when people use tax time to try to get you to do something that might help them steal your personal info. Know this: The IRS will never initiate contact with taxpayers via email about a bill or refund. So don’t click on anything that says it’s from the IRS, because it almost certainly is not.

Phone Scams: This was much bigger last tax season, but in October 2016, one of the primary phone centers from which these calls originated was raided. But phone calls do continue, and it usually involves con artists threatening you with police arrest, deportation and license revocation, among other things. The IRS always initiates contact with you via postal mail and typically only contacts you via phone for an ongoing correspondence.

Identity Theft: This isn’t “tax related”, except that people like to steal SSN info, and file taxes before you do. Simple solution: file your taxes before the scammers file your taxes. We can help with that.

Return Preparer Fraud: Believe it or not, there are some tax pros who get set up with the IRS for purposes of stealing personal information and perpetrating refund fraud. The good news is that such tax professional outfits are pretty easy to spot. For one, they usually don’t keep in touch with their clients via a weekly blog. 😉

Fake Charities: This is when organizations set up shop for the purpose of soliciting (supposedly tax-free) donations. They imitate legitimate organizations and unsuspecting donors give them money. The IRS has a tool you can use called “Select Check” to ensure the organization you’re donating to is legit.

Inflated Refund Claims: Don’t have anyone prepare your taxes who asks you to sign a blank return or charges fees based on a percentage of your refund. This is a no-no.

Excessive Claims for Business Credits: There are two credits that the IRS is keeping an especially close eye on. One is the fuel tax credit, which is a tax benefit generally not available to most taxpayers and most often limited to off-highway business use, including use in farming. The other is the research credit. Research activities have to be scrupulously documented to qualify.

Falsely Padding Deductions on Returns: Basically, this is about lying on your return and improperly claiming credits such as the Earned Income Tax Credit or Child Tax Credit. This problem, and the IRS trying to fix is, is why refunds were delayed this year for many.

Falsifying Income to Claim Credits: Sometimes con artists will try to get taxpayers to falsely claim income so they can qualify for the Earned Income Tax Credit. Basically again, don’t lie to the IRS.

Abusive Tax Shelters: Sometimes tax pros invent complicated schemes (usually involving insurance) to falsely enable clients to avoid paying any tax. If someone offers you a scheme that sounds too good to be true, check it with us.

Frivolous Tax Arguments: This is aimed at the crowd that claims that the income tax “has never properly been legislated” and so therefore nobody should have to pay any tax. You can understand why the IRS doesn’t dig that. Here’s their rundown on the various schemes: https://www.irs.gov/tax-professionals/the-truth-about-frivolous-tax-arguments-introduction

Offshore Tax Avoidance: Not a great idea these days. The Panama Papers, while fascinating, aren’t a guide for financial planning.

Now … in order to avoid this stuff, it’s actually quite simple.

1) Be skeptical. Don’t just take somebody’s word for it, especially if they are contacting you via phone.

2) Don’t reply to (or click on) emails, calls or other communication without first confirming that the source and sender is legitimate. If you get something that seems hinky, check with us.

3) Did I mention that you can check with us? Sure, you can go to the source itself (the IRS), but this is after all what we are here for.

Allow us to serve you well.

To your family’s lasting financial and emotional peace…

Warmly,

Jarrod Barton
(610) 285-9883
Strategic Tax & Advisory Services