Tax Preparation Made Easy

Here are 4 easy steps I wanted to share with you for making it easy to have your 2016 taxes prepared:

1. Gather your forms.  Be sure you know where your W-2, 1099, 1098 and other forms are.  It’s also important to understand what forms you will use to prepare your taxes or have others prepare them.  Search for information on the proper forms to use based on your circumstances. I think it’s important that you are engaged in this process, rather than just handing a shoebox full of receipts and other papers to the tax preparer to sort through. In my experience this professional certainly won’t be happy with you and may even charge you extra. Seriously, organize your information and know for yourself what your income and expenses are so you are educated.  Sandy Botkin, a well known tax attorney and CPA, says, “The seven most expensive words are ‘My tax accountant takes care of my taxes.’”   Stay in control of your own finances, money and taxes.  It could be worth as much as $2,000 each year. 

2. Decide how you should file.  Tax software is available and of course professionals can help. Search online to get help on how to prepare your taxes.  If your taxes are simple and you have no business activities recorded, then it can be inexpensive to hire someone rather than doing it yourself.  I have always prepared my own returns, then I hire a professional to check what I have done. This has been the most cost efficient method for me as it saves on the hourly rate paid a professional to do your taxes. Plus, I have always found that using a professional improves my situation and I make the necessary changes for the following year.

3. Determine when to file.  This year, April 18 is the tax filing deadline.  If you file early, you still have time to pay any balance owed up and until April 18.  Remember that when you extend your tax filing, it doesn’t extend your need to pay.   All money owed needs to be paid by April 18 or you will have to work out a payment plan with the IRS and this will cost you extra money in interest and penalties.  

4. Get organized for next year. Since you just finished preparing your 2016 returns, you learned some things about your organization.  Identify those helpful items for next year and implement them now.  As the years come and go you will get better and better at being organized.  

For more information on how to pay the proper amount of taxes, contact me:

A Quick Overview of Financial Basics and How to Apply them in the Right Order

Many people get caught in the trap of wanting to do things out of order when it comes to finances. They are tempted to invest their way out of debt, for example, rather than getting out of debt first, then investing the interest money they save by being out of debt to make more.  Knowing the rules of the financial games you are playing suggest that you must do “first things first.”

Here’s an idea of how to apply financial principles, step-by-step, and in the right order:

The Basics

  • Consider getting an education or learning a skilled trade.
  • Secure vocational income.
  • Avoid getting into debt; if you are in debt, get out of it.

Cover Risks

  • Buy basic life and disability insurance (don’t wait to buy life insurance until you are older, do it now while it is still affordable and can be used to fund retirement later in life).
  • Build emergency and emotional savings.
  • Purchase a house.
  • Minimize taxes

Invest Surplus Money

  • Consider investing in guaranteed investments such as CDs or Money Market accounts.
  • Consider investing in low-risk options such as mutual funds.
  • Consider investing in real estate.
  • Consider investing in individual stocks.

As you play each of these financial games in the order that is best for you, you will naturally be led to an understanding of the rules governing the next game. Each step you take will build confidence until you understand how to play even the most risky financial games and have the economic wherewithal to afford to play them.

Because every financial game we play comes with a certain amount of risk, knowing the rules means understanding what thos risks are. Some financial decisions are less risky than others; nevertheless, each one can be a gample. Don’t put vital money in jeopardy due to high-risk investments you cannot afford to lose (and this includes bailing out adult children with sacred retirement money you will not have the time or energy to recoup should those children never pay you back).

Be wise and always do “first things first” when it comes to finances.

Organizing Your Finances Enables the Creation of Additional Wealth

It is so important to know the 10 financial principles that can change your life is so many wonderful ways. That’s why I have been spending time covering each of the Money Mastery Principles, which build upon each other and all work together in harmony. As you apply each principle on top of the next, you will get in better and better control financially. That’s what today’s post will cover, Principle 8, and the importance of organizing all the principles to work together.

Organizing Your Finances Enables the Creation of Additional Wealth. Disorganization breeds procrastination which leads to lost opportunities. Organizing your finances means knowing where important documents are, having an estate plan for your loved ones, and knowing how to protect your assets from over-taxation, litigation, and theft.  

It can be hard to know where to store important documents, but we must try.  When I see someone who is not organized, it makes me sad for them.  They have no idea how expensive it is to them by not being organized.  I know from personal experience, when I try to get organized, as soon as I get started I realize how long it will take and sometimes feel defeated before I get anything done.

Consider this statistic, only 1 out of 7 families has a simple will.  It is a well known fact we will all die.  No one has gotten out of this life alive.  Why don’t we get organized before we die so we don’t leave a financial mess for our family members? It’s largely because of this feeling of being overwhelmed with difficult decisions about what to do with certain things, and we give up before we have even begun.

In my 45 years of experience, I have helped many people get organized and it has made a world of difference to them to get that nagging feeling of not knowing what will happen to their money or belongings when they die off their mind and come to a place of peace, hope and prosperity. I have done this by first having them get their spending and debt under control. Once
these things are working well together, people find they are acquiring a little bit of a surplus and before long, they have money and assets they need to manage and organize so that Uncle Sam, inflation, and mismanagement doesn’t eat away everything they have worked so hard to put together.

So that’s when we get the wills and living trusts put together and name a guardian for their children.  I have watched while a family was mourning the loss of their father, they knew that he had provided enough money to pay for their college, and take care of Mom and all because he had stopped being frozen by what he perceived would be hard to do, and got organized, before it was too late.

Without planning, if you have minor children and both you andEstateOrganization your spouse pass away at the same time, your resident state will take over and direct all the affairs of the children.  And your assets and money will follow the guardians that the court appoints, during the court proceedings.  Along with foster parents chosen for you, all debts become due and payable upon death.  Add all the court costs and attorney’s fees and your family will pay out an additional $30,00 or more to get things settled.

Do the smart thing. For about $495 and 60 minutes you can avoid all this expense and give yourself peace of mind by setting up a living trust and funding it, then distribute copies to all family members who are involved for their records.  Go to and get your financial affairs organized.  Then review documents once a year and make necessary changes.  Contact me with questions (801) 244-5756, or



Planning for Your Own Death Is Important, But Seldom Done…

Carve out some time to discuss your financial situation in the event you die.  What are your wishes?  What cemetery will you be buried in?  Have you titled your property correctly so you don’t have to wait for the probate court to decide things for two years?  How should you designate a beneficiary?  Why and when do you need an attorney?

Beyond these very big, but standard issues let me just point out one other discussion point that perhaps you have never thought to discuss in preparation for your death:  Create a document and determine a location in which to store this document for passwords and other absolutely important information.  Passwords give your surviving family members access to bank accounts, utilities, insurance products, and so forth.  Be sure the document includes account numbers and other vital information to go along with the password. I review my key contacts with my spouse each January so we are both up-to-date about auto and homeowner’s insurance policies. We also review the current Screen shot 2016-06-03 at 1.42.28 PMstatus of our living trust, along with any agreements we may have entered into.  I update the password document and make sure PIN numbers, where to find birth and marriage certificates, titles to the car, where the key to our safety deposit box is kept, and other important information are included. That way, if I die, my spouse knows what’s going on, and when we both die, our kids can more easily settle our estate.

We all pass away, so why not plan for this?  Save time and money by getting organized in advance and do like the elementary schools do by establishing a quarterly financial “fire drill” so to speak.  If the elementary school caught on fire, small children have practiced what they would do to save their life.  Most schools don’t catch on fire, but you will surely die.  This is a certain event just like taxes.  Save grief and headache for your survivors by planning ahead and then review for any changes at least once a year.

Getting to Know Your Financial Adviser Will Bring Peace at Time of Spouse’s Death

Almost 75 percent of all widows fire their financial adviser immediately upon the death of their spouse because there is no relationship of trust.  In over 45 years of meeting with client, I have often seen the wife resist talking about death and will sometimes have an excuse about missing the meeting when we are going to be discussing estate settlement. She will say something like, “My husband will take care of all this.”  Or, “Bill will catch me up to date later.”  This is a serious mistake.

When a spouse passes away,  financial issues must be addressed or the costs of not doing so can destroy the widow’s future.  If you are a woman who has relied a little too much on your husband to take care of the finances, now is the time to get comfortable with estate planning and settlement and especially with how your finances are going to be play out after your spouse’s death.

Here are some of the issues widows and widowers must deal with after death:

  1. Titling of property.
  2. The need for at least 12 death certificates (many people order just one but find they must submit an original in order to claim Social Security benefits, or life insurance proceeds, and so forth. If you do not get an appropriate amount at death and have to reorder, it can take months before additional ones are issued. Meanwhile, you can’t file insurance claims or get Social Security income.
  3. The need for a joint banking account. So, for example, if a refund check in the name of her spouse arrives from a magazine subscription  six months later, she can deposit it.  Perhaps a refund check is sent in the name of her deceased husband from an over payment on an insurance contract, or a business debt is paid.  There are many examples of why a joint banking account is needed.

All of these things and many more are reasons why having a good relationship with a qualified financial adviser can help you when your spouse dies.  Using the old “trial-and-error” technique on 50 financial issues upon the death of your spouse is a horrible experience.  Find a good adviser you trust, then review ALL financial issues annually. Planning ahead will help you find peace at a time of grieving. 

For more information about financial coaching and how it can help you even more than just a good financial adviser, contact me:

Protect Yourself Financially by Getting Organized

Getting financially organized can mean big payoffs, as one of Alan’s clients I’ll call Edward Smith* illustrates.  Edward was a man who loved his family and was concerned about what would happen if he died before his wife.  He knew his wife, Amanda*, had tender feelings for their children and that she would give up everything she had to make them happy. Edward wanted to plan ahead financially to ensure that their children would not take advantage of Amanda’s benevolent nature after his death.  Amanda had never worked outside the home since their marriage in 1962 and he knew she would be ill-prepared to go out and make a living if all their retirement savings were eaten up by his children.

Edward owned a shirt manufacturing company jointly with some of his employees.  At his death, the company would be sold to the employees for an agreed amount; Edward’s share was more than ample to keep Amanda financially secure for the rest of her life. Edward wanted the proceeds from his company’s sale to go directly to Amanda.  He worked with his attorney and together they formed a plan that included a trust fund.  Edward’s bank agreed to be a co-trustee of the fund along with Amanda, and was charged with the responsibility of making certain Amanda was the primary benefactor, with their children as secondary recipients of the trust’s proceeds.

Edward eventually passed away and his company was sold as planned.  Proceeds from the sale were transferred to the family trust.  Within a year of Edward’s death, Ralph*, one of Edward and Amanda’s sons, graduated from college and began working.  His new employer presented to him a business venture that would require a $50,000 investment in order for Ralph to participate.  When Ralph went to Amanda for the money, she was excited to help, thinking it would be an easy matter to withdraw the funds and giveGiveBack them to her son so he could get started on the business venture.  However, the bank knew it had the responsibility to keep Amanda’s money safe and secure.  After analyzing the possibility of Ralph losing this $50,000, the bank used its authority to refuse to give Amanda the money.  She was disappointed and her son was furious.  Ralph assumed his entire future was going to be lost, so he put pressure on his mother to go back to the bank and ask for the money.  After Amanda persisted, the bank finally did consent to release $10,000 to the son.  One year later, the business venture Ralph had invested in went belly up and he began working for another firm.  The $50,000 “investment” that never was became a family joke.

Thanks to Edward’s strong organization and forethought, he was able to protect the majority of Amanda’s nest egg.  Planning ahead can save you and your family heartache and your hard-earned savings.  Edward’s actions demonstrate the need to review your current situation and then take action:

Get mentally organized.  If you are overwhelmed by all that needs to be done, learn to relax and take one thing at a time.

Learn what financial documents to keep and what to throw away.  It’s smart to keep tax documents for at least seven years.  Keep receipts and other documents only if you need to prove something — if not, throw them away. This reduces clutter.

Organize the documents  you must keep into a simple, yet efficient filing system.  Alan and Peter have found that 95 percent of their clients, when asked, do not know where they keep their automobile insurance policy.   Organize all your financial papers into an easy-to-use filing system.

Organize investments based on what’s left after taxes.  While most people organize their assets based on the risks of that asset, how easily it could be sold, when it could be sold, or on how much the asset is worth, you should organize based on the taxation of an asset.  While each individual’s Tax Drawerssituation may vary according to risk, liquidity, timing and so forth, everyone’s situation is universal when it comes to taxation.  All people are subject to tax. Taxation is definable and absolute. The taxes we pay are demanded of us before we do anything else.  That’s why organizing finances around what you get to keep after paying taxes is the best way.  By doing so, it becomes easier to plan what you need to do because you know what’s absolutely going to be left over.  If you organize based on risk, for instance, you may never be quite sure what you have to work with because that risk will always vary.  But taxes are sure.  By organizing based on taxation, you can know either how to keep taxes to a minimum, thus keeping more of your wealth, or know how much money you will have left after paying taxes so you can feel free to work with what’s left in order to create additional wealth.

Because there are only five ways you can be taxed, assets should be organized based on the following five dimensions of taxation:

Taxed:  savings accounts, checking accounts, credit union accounts, reserve funds, etc.

Tax-free:  Municipal bonds, Roth IRAs, etc.

Tax-deferred:  Defined benefit plans, 401(k)s, IRAs, SEPs, Keoghs, annuities, mutual funds, pensions, etc.

Life Insurance:  Life insurance can be taxed in a variety of ways, and most often is not taxed until the benefit is received in cash while you are living.  If you die, then the income is tax-free.  How you receive the money determines whether it will be taxed or not.

Capital Gains:  Real estate, mutual funds, limited partnerships, stocks, precious metals, fine art, commodities, etc.

Organizing your assets based on these five categories will help you find a significant amount of extra money you didn’t know you had because:

  1. It makes it easier for you to visualize your assets and in terms of what you get to keep for retirement.
  2. It provides a basis for calculating and projecting the accumulation of your wealth.
  3. It helps you understand the impact taxes have on your long-term savings and investment programs.

The following example illustrates the importance of organizing based on these five categories.

Suppose you put all your money in a 401(k) program for retirement.  This money will grow because you will be able to defer paying taxes on it all those years you are working.  However, when you begin withdrawing this money, 100 percent of it (that includes the interest it has accrued) will be subject to income tax.  If you organize your assets based on the way they will be taxed and use a forecasting tool, you will be able to play “what if” scenarios with that 401(k) money to see what would happen if you put it somewhere else.  “What if” you put this money into a tax-free municipal bond rather than a 401(k) or capital gains account?  “What if” you put it into a Roth IRA, or “what if” you invested it elsewhere?  By sweeping all the financial elements that will affect this money out to a future date and looking at the results, it becomes easy to test how a financial decision made today will actually impact your future.

Because there are no future decisions, only decisions made today that affect the future, knowing how to organize your assets and predict what will happen to them provides you with valuable knowledge that will let you make much better choices than if you didn’t possess that knowledge.

Create additional wealth by organizing your finances in a manner that will protect your assets from over-taxation and poor decision-making by yourself, spouse, children, or others.

5 Tips for Protecting Yourself from Identity Theft

Gone forever are the days when financial transactions were conducted solely at the local bank, people paid cash for almost everything, and everyone knew their banker personally and did business with him through a simple handshake. While processes then were much simpler, in many ways, they weren’t very convenient.

Getting cash out of the bank wasn’t as simple as slipping a card into an ATM. Transactions weren’t automated and could take days to complete. Today, conducting financial transactions is much more convenient, allowing people to make instantaneous electronic transfers, put cash in their hand any time, day or night, and do business with dozens of lenders located thousands of miles away fromshutterstock_283185716 their local banker. But with all that convenience has come a complexity that breeds a loss of privacy and encourages thieves to steal more than just your money. Identity theft has become a major problem in the U.S. today and its up to you to protect yourself from it.

Here’s what you can do to make sure it doesn’t happen to you:

  1. Never give out your personal information over the phone. If someone calls claiming to represent a credit union, bank, or credit card issuer asking for verification of your full name, address, personal identification numbers, and so forth, hang up immediately. It’s probably a scam. A bank or credit card issuer already has this information and will not contact you by phone to get it. Phone your bank, credit union or credit card company to verify whether they called you or not. That way they can be alerted to the problem and take appropriate action.
  2. Shred rather than throwing away documents that have personal information on them. Anything that has your Social Security number, credit card numbers, bank account numbers, or any other identifying information printed on it should be shredded or burned. This includes any credit card applications you receive in the mail. It’s easy for someone to change the address and other information on the application and get a card in your name. Would-be identity thieves scrounge around in garbage cans and dumpsters looking for this type of information.
  3. Mail bills from a post office rather than placing them in your home mail box for pick up. Check your credit report annually. You can do this once a year free of charge and without negatively affecting your FICO score. Look for any suspicious activity on the report.
  4. Memorize PIN numbers. Do not write personal identification numbers anywhere.
  5. Opt out of credit card mailings. If you don’t want to receive any more credit card offers, call the credit bureaus to be removed from the mailing lists that banks and other creditors purchase in order to send you all that junk mail. To opt out, call (888) 567-8688. This number will let the three main credit bureaus know you don’t want to receive any junk mail advertising.

Organize Your Finances to Create Additional Wealth

Many people have had experience using an estate planning system, which includes help in organizing asset schedules and planning for estate distribution and settlement upon death. But planning the way you want your assets and money to be distributed at your death is only one part of a good financial organization system. The right one will do much more, extending that organization to  other areas of personal finance, allowing you to master plan every aspect of your financial life, including the way you spend, borrow, save, and pay taxes while you are living.  Using such an estate planning tool is vital if you want to create wealth on ANY income.

A comprehensive approach to financial planning aids in accurately predicting how your spending, borrowing, savings, and taxes will affect your overall financial well being. A good organizational system should help you create the following:

  • Spending Plan
  • Debt Payoff Plan
  • Savings/Retirement Plan
  • Tax Reduction Plan
  • Estate Planning and Settlement

Organizing the way you spend through a Spending Plan. A good master planning tool should prompt you to answer questions about your personal, social, and financial feelings about money and toshutterstock_283185716 create a history of the way you have spent money in the past. It should also help you analyze how spending money makes you feel so that you can prioritize your values, create realistic spending goals that you can track, and help you get in control of your spending within the first month of applying the plan.

Organizing your debt payoff.  A good financial organization system should also help you create a debt elimination plan. It should prompt you to pull your credit history, review your current debt load, Debtdetermine how to prioritize debts for quickest payoffs, and show you how to power down your debt so you can get out of ALL debt in under 10 years.

Organizing your retirement. Financial organization should also include powerful savings and retirement planning tools that prompt you to observe how saving for emotional, emergency, and long-term needs is affecting your overall financial well being. And of course it should help you accurately predict how muchshutterstock_128683532 (534x800) money you will need for retirement — enough that you cannot outlive that amount.

Organizing the way you pay taxes in order to reduce them. A good master planning organizational tool will also include information on how to take advantage of tax deductions and of course include all the estate planning forms and schedules typically found in standard estate organizer. It should also provide storage to help organize important legal documents your loved ones will need to quickly and easily settle your estate upon your death.

We have found that clients who master plan every aspect of their finances, from the way they spend and borrow, to the way they save and pay taxes, have a much easier time accurately predicting their future and remaining in control of changing events than those who do not.

For information on how to obtain a comprehensive master planning organizational system that will help you get in control of every aspect of your financial life, call the Money Mastery offices today:  (801) 292-1099.

Cut Your Life Insurance Costs by 45 Percent…

At Money Mastery, we teach the importance of getting financial affairs organized in order to protect your assets from risk and theft and to be sure you are adequately but not overly covered in case of emergency.

That’s why it’s so important to understand your life insurance coverage. While you probably have adequate life insurance to protect your family, you may not need as much coverage as you think. You can save big by asking yourself the following questions:

  1. Would my death cause a financial hardship to someone? If you’re not married or you and your spouse (both of whom work) do not have children, OR your children are grown and you have a pretty good retirement nest egg, you may not need life insurance at all.
  2. Do I know how to buy life insurance on my own? Most people think, erroneously, that they must buy coverage through an agent. You can save money by buying insurance on your own.Docs and glasses
  3. How much coverage do I really need? You probably need a lot less than you think. You might be wasting thousands of dollars a year in unnecessary insurance costs. Before another day goes by, learn how to cut your life insurance costs up to 45 percent by spending just one week reviewing your policy.

Calculate How Much Coverage You Really Need

There are lots of calculators and formulas around that can help you determine exactly how much life insurance you need. One of the best is offered by Money Mastery. Another calculator can be found at Or, as is commonly advised by financial planners, use the rule of thumb that your life insurance should equal 8 to 10 times your annual take-home pay.

The Hume Group, Inc., a financial educational company, advises,  “Lean toward the low side of that range if:

  1. You have only one or two children to educate, if your spouse works full-time, or if you have a low outstanding mortgage.
  2. Lean toward the high side of that range if you have more than two children to educate, if your spouse does not work or works only part-time, or if you have a high outstanding mortgage.”

How Long Should You Insure For?

Remember, you don’t need life insurance if your death will not cause a hardship for others. Once the chance for hardship passes, so does your need for life insurance. Reduce coverage after your house is paid for, and your children are less dependent on you for education and other support. The Hume Group advises, “Once retirement for you and your spouse is secure, the most insurance you might need would be a small policy to cover burial expenses.”

Please contact the Money Mastery offices directly for your FREE life insurance calculator:  (801) 292-1099.

Don’t Let Your Retirement Plan Become an Abandoned Garage

Most people have a hard time staying organized.  I know this as I have coached thousands of people using the Money Mastery online training program.  As I have reviewed their Spending Plan I have urged them to create (or a budget as some call it, but it really isn’t), I see a lot of disorganization in those plans. I work with them to revise the plan and make it easily trackable. When we move on to discuss their debt plan, I see even more chaos, which I have to help them put right so they can get out of all debt in just a few years as I promise they will if they will follow the plan. Lastly, when I review their retirement and investment portfolio it isn’t pretty.  Picture an old abandoned garage with shelves full of stuff that’s not being used much, like tools, battery chargers, spare tires, quarts of oil, a wood splitter, an old bicycle, etc.  The way most people’s retirement plan looks is based on them setting something up years earlier and then rarely if ever reviewing it to be sure it is still relevant and helpful.

How can a person be successful planning for retirement when they aremy-goals basing it on outdated goals, investment accounts about which they know nothing, insurance products that they no longer need, and so forth?  I say, get organized with your spending first, then your debts and finally make some sense out of your retirement portfolio.  This effort is so important.

Here’s how to get started…

First, ask yourself this most important of all retirement questions:  “What does ‘retirement’ mean to me?” Does it mean that you will quit working? For some people, it does. Some people don’t want to quit work, ever, and will hope to continue on until they are too sick to do it anymore. Does “retirement” mean that you will quit work but continue providing service and philanthropic ventures? Does “retirement” mean travel for you? In order to be organized for retirement, you must know what your goals are going to be and the things you want to do when you retire.

Second, forecast some future dates at which you think you might want to retire — perhaps a year from now, five years, or 15.  Then ask the following questions for each period of time.

  • How much surplus savings will I have at that time?
  • How much debt will I still have, if any?
  • How much income will I have at that time?
  • How healthy will I be?
  • What are my other specific goals that are important?  

As you answer these questions, you will get a feeling of how well organized you are and hopefully motivate yourself to make a list of actions needed.  If you will do this every six months for the rest of your life, you will be so much better prepared when you retire.  If you choose not to take stock every so often, plan on a disorganized, outdated, and disappointing retirement that looks like an old garage you forgot to clean!