For some folks who have only W2 income and basic deductions, a simple Form 1040 will do the trick. But for anyone who has self-employment income, expenses for higher education or mortgage expense or casualty loss, or income from investments of the sale of an asset, or any of 1,000 other types of income or expenses or events, then the simplicity of the 1040 disappears. Other forms are needed.

The more complexities of your financial life, the more complicated your tax return. Years ago, I hired a CPA every year to prepare my personal and corporate tax returns. Having one was essential. In fact, one year his $500 fee resulted in my obtaining a $6,000 refund that I would have otherwise unknowingly forfeited, simply because I did not know about my tax rights for deducting per diem allowances while working as a consultant in another state for a period of less than 6 months while maintaining my primary residency in my home state.

But now my financial situation is much simpler. No trading of investments as I work to pay off all my debt. No traveling for my work and very few work-related expenses. And only basic charitable contributions. So, in years like this, I simply do my own taxes. Personally, I use TurboTax. Last year I used TurboTax Online and loved it. The Home and Business Edition was necessary to do some basic business-related deductions. Filing electronically, my refund was posted to my checking account in about 14 days. And that sure is a lot better than the “good ol’ days”!

Many times I am running late on getting my stuff together to begin filing. So, I simply file an application for an automatic 6 month extension: IRS form 4868. With some major events in my life, it actually took me two years to file my 2005 taxes. I owed no penalties or interest because I had prepaid that years taxes by applying funds from my 2004 return. But be advised that if you owe taxes when you file your extension, you should pay whatever you think you owe, or you will be presented a bill for penalties and interest.

TurboTax is especially helpful if you use Quicken throughout the year. You can automatically [easily] track income and expenses to your designated categories throughout the year; and you can set it up to download your transactions from your bank or credit card so that you can minimize manual input. Then at tax time you simply import your transactions into TurboTax.

Wishing you more time with friends and family, and less time doing taxes!

Michael

The fact that our old GE dishwasher was a poorly working hand-me-down helped make it an easier decision to retire it.  I simply removed it and set it out with the trash.  In its place we now keep our family-sized 40 gallon trash can – which we fill every 1.5 days!

Needless to say that with a large family, we produce lots of dirty dishes, as well as having many other challenges in the home organization department.  I am the first person to say that no manner of dishes is fun in my eyes.  But, I am happy to say that having a system that you can work easily and consistently can – and does – bring an element of peace to the home.

Now we clear the table and do the dishes immediately after a meal.  It is an opportunity to build self-discipline into our children by example, as well as to bond together during that time.  Sometimes we’ll listen to the Adventures In Oddessey family radio program over the Internet.  We hope that exercising this family activity will encourage the kids in practicing other forms of self control and self discipline.  Plus, our table is always clear, and our dishes are always clean and available for serving on.

Well, I guess I better get to the consumer safety part of my story.  My inspiration for this article on clean living actually came from soap.  That’s right.  We ran out of dish soap and the dirty dishes began to stack up.  So, I grabbed the next available soap that was handy in the closet and was just about the same amber color, and I filled the kitchen sink soap dispenser with it.  It was antibacterial hand soap.

Sounds good right?  If it can clean hands, and if it is antibacterial, then it ought to be good enough for dishes.  At least that was my thinking.  But the problem is that the hand soap binds to surfaces in such a way that it leaves a residue – no matter how well you rinse it.  So, for several days every cup of tea or water had a very soapy taste.  Yuck!

However, adding real dish soap to the dispenser diluted the other stuff well enough to fix the problem and get us back on on track, as well as initially scrubbing with a soft dish brush during rinsing.

All the best to you in living clean!
- Michael Dean

Banks and brokers know this but have no incentive to see you transfer your IRA to another custodian like Sterling Trust Co. who has a who department dedicated to show you how to use your IRA money to invest in almost anything. Be careful and consult your adviser.

For more information contact:

David H. Disraeli, CFP(r)
david@lifepln.com

The past 18 months have been anything but steady for traditional investments- those like stocks, mutual funds and bonds. In fact the S&P 500 earned only 5.5% last year and has already lost that and more so far this year. As a money manager for the past 22 years, I’ve used all sorts of traditional investments and techniques. But they all have one thing in common – they are dependent on a cooperative general market trend. So what’s a person to do when things get ugly.

Well the current sub-prime mortgage debacle has actually created an enormous opportunity for savvy investors. Most banks have drawn in their reigns which puts many, borrowers with good projects into never never land. What I’m leading up to is the concept of investing directing into secured real estate notes, just like a bank with an appraisal, title policy, servicing agent – the works. Except you get the interest and don’t’ have to support a bank lobby, tellers, ATM machines and stodgy management’s salaries.

How does it work? For more information check out my own blog. Most of the notes we fund have a loan to value of 70% and pay 14% monthly interest. Is there risk? Of course but very different from the stock market.

David H. Disraeli, CFP(r) david@lifpln.com

Sounds crazy except you’ve already done it. The IRS gets at least 1/3 of your profits when you add up FICA/ Medicare, income taxes etc. If you own an IRA it’s even worse. In the US, we have what I call two tax systems: The voluntary tax and the involuntary tax. People continue to pay taxes voluntarily because of lack of planning. Involuntary taxes are the ones you pay because you have to.

The problem with tax deferred assets like 401k’s and IRA is that you only own 66% of the account. No matter what you do, you can’t get your hands on the IRS’s 33%. Try it and you’ll see. Either you pay it or your kids pay it. And the propaganda that time value of money is working for you is wrong – just do the math.

What if you could convert a taxable asset like and into a tax-free inheritance to your heirs? Sound too good to be true? We’ll its not. Its called wealth transference and its done using insurance and the transfer mechanism. Not just any insurance, but a specially designed policy that allows you to use your IRA while you may need it, but converts it into a tax free inheritance to your spouse or children.

For more information contact me at
david@lifepln.com

David Disraeli, Certified Financial Planner