TMTW #164 – Estate Planning

Posted on December 4, 2013 by taxblogger

Tax and Money Tip of the Week:
Estate Planning
December 4, 2013 | No. 164

Key Estate Planning Documents You Need

This is a general, informational piece only and not intended to provide legal advice. Each individual should seek legal advice for their own situation.

There are five estate planning documents you may need, regardless of your age, health, or wealth:

1. Durable power of attorney
2. Advanced medical directives
3. Will
4. Letter of instruction
5. Living trust

Durable Power of Attorney
A durable power of attorney (DPOA) can help protect your property in the event you become physically unable or mentally incompetent to handle financial matters. A DPOA allows you to authorize someone else to act on your behalf, so he or she can do things like pay everyday expenses, collect benefits, watch over your investments and file taxes.

Advanced Medical Directives
Advanced medical directives let others know what medical treatment you would want, or allows someone to make medical decisions for you, in the event you can’t express your wishes yourself.

There are three types of advanced medical directives. First, a living will allows you to approve or decline certain types of medical care. Second, a durable power of attorney for health care (known as a health-care proxy in some states) allows you to appoint a representative to make medical decisions for you. Finally, a Do Not Resuscitate order (DNR) is a doctor’s order that tells medical personnel not to perform CPR if you go into cardiac arrest.

Will
A will is often said to be the cornerstone of any estate plan. The main purpose of a will is to disburse property to heirs after your death. Equally important, the will gives you the ability to name the executor who will manage and settle your estate and allows you to name a legal guardian for minor children or dependents with special needs. If you don’t leave a will, these items will be determined according to state law, which might not be what you want.

Letter of Instruction
A letter of instruction (also called a testamentary letter or side letter) is an informal non-legal document that generally accompanies your will and is used to express your personal thoughts and directions regarding what is in the will. Unlike your will, this document remains private and gives you the opportunity to say the things you would rather not make public. This can be the most helpful document you leave for your family members and your executor.

Living Trust
A living trust (also known as a revocable or inter vivos trust) is a separate legal entity you create to own property, such as your home or investments. The trust is called a living trust because it’s meant to function while you’re alive. You control the property in the trust, and whenever you wish, you can change the trust terms, transfer property in and out of the trust, or end the trust altogether.

As always, give us a call if you have any questions.

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , , , | Leave a comment

Happy Thanksgiving!

Posted on November 27, 2013 by taxblogger

Tax and Money Tip of the Week:
Happy Thanksgiving
November 27, 2013

There will not be a Tax and Money Tip of the Week this week.  We would just like to take the time to wish everyone a safe and happy Thanksgiving holiday!

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , | Leave a comment

TMTW #163 – Year End Tax Planning

Posted on November 20, 2013 by taxblogger

Tax and Money Tip of the Week:
Year-End Tax Planning
November 20, 2013 | No. 163

This is the time of year in our CPA practice that I work with small business owners and individuals to perform tax checkups to help them project their tax liabilities for 2013 and make tax saving recommendations of moves they can make between now and year-end. Frequently, just defining the amount of taxes they owe via these planning services helps manage their cash flow so the businesses and individuals don’t have a big amount due and/or surprise each Spring when we prepare their tax returns.

For the business owner and individuals, one of the largest expenses can be taxes.  For this reason alone, this expenditure requires planning and monitoring as any other major expense.  A year end planning meeting with your CPA should include a discussion of:

  • any assets purchased during the year
  • anticipated year-end revenues and expenses
  • plans for current year retirement funding
  • any refinancing of debt that occurred in the current year
  • any changes to your business structure

This planning meeting should prepare the business owner or individuals to anticipate the amount of taxes that will be owed on March 15th (or April 15th if the tax burden flows through to the personal return).  To be effective, tax planning needs to be done prior to New Year’s Eve.

Use our experience in year-end tax planning to enhance your bottom line.  Give us a call if you would like to discuss your personal tax situation and see how we can save you taxes.

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week

Posted in Tax and Money Tip of the Week | Tagged , , , , | Leave a comment

TMTW #162 – What Records to Keep

Posted on November 13, 2013 by taxblogger

Tax and Money Tip of the Week:
What Records Should I Keep
November 13, 2013 | No. 162

This week we will discuss a question that I get in my CPA practice a lot:
How long should I keep certain records?

Here are some recommendations:

Keep Forever:

  1. Copies of Tax Returns only
  2. W-2s and 1099 income forms
  3. Roth IRA statements(to prove that you have already paid taxes when you withdraw at retirement)
  4. Life insurance policies
  5. Birth and death certificates

Keep for 3 years:

  1. All Backup records of the latest 3 years of Federal and NC income tax returns
  2. Bank Statements, brokerage statements,  1099s, deductions, etc.

Why 3 years?

Because the statute of limitation is 3 years under which the IRS or NC Department of Revenue may change your return or you can amend your return. However, if these agencies believe that a taxpayer has underestimated their income by 25% or more, this period becomes six years.  If the IRS believes you filed a fraudulent return or did not file a return at all, there is NO statute of limitations.

Therefore, never throw away your tax return copies that we always provide you.  It is possible, but very difficult and time consuming to try to get copies from the governmental agencies of your past tax returns, especially old ones.

Also, when deciding what to store in a safety deposit box,  keep in mind when someone dies, the safe deposit box may be sealed by taxing authorities. This action may cause problems in probating and executing the will; therefore, store original copies of the will in a fireproof safe at home as well as with your attorney.

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , , , | Leave a comment

TMTW #161 – Good Communication is Key to Lowering Your Tax Bill

Posted on November 6, 2013 by taxblogger

Tax and Money Tip of the Week:
Good Communication is Key to
Lowering Your Tax Bill
November 6, 2013 | No. 161

After over 30 years in the tax business, I continue to find that good communication with the CPA is the key to lowering taxes.

Solid bookkeeping for your business enables you to take the most deductions possible while minimizing taxes.

Mid-year tax planning also helps plan and keep up with your current taxes,  prevents unwanted surprises, and saves a lot of taxes for our clients each year.

We appreciate all of our clients and thank you for your business.
Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , | Leave a comment

TMTW #159 – When to Claim Social Security Benefits

Posted on October 31, 2013 by taxblogger

Tax and Money Tip of the Week:
When to Claim Social Security
Benefits | October 23, 2013 | No. 159

Here is an article by Jane Bryant Quinn from the AARP Bulletin –

When to Claim Social Security Benefits

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , , , | Leave a comment

TMTW #160 – Social Security Boot Camp

Posted on October 30, 2013 by taxblogger

Tax and Money Tip of the Week:
Social Security Boot Camp
October 30, 2013 | No. 160

Here is an article by Mary Beth Franklin from the InvestmentNews –

Ten-shun! Welcome to Social Security Boot Camp

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , , , | Leave a comment

TMTW #158 – Making the Most of Your IRA

Posted on October 16, 2013 by taxblogger

Tax and Money Tip of the Week:
Making the Most of Your IRA
October 16, 2013 | No. 158

Here is an article from Investor’s Business Daily –

Making the Most of Your IRA

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , , , , | Leave a comment

TMTW #157 – New Options and Taxes in Health Law

Posted on October 9, 2013 by taxblogger

Tax and Money Tip of the Week:
New Options and Taxes in Health
Law | October 9, 2013 | No. 157

Here is an article from Investment News – 

Prepare for Options and Taxes in Health Law

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , , | Leave a comment

TMTW #156 – Social Security in 1st Year of Retirement

Posted on October 2, 2013 by taxblogger

Tax and Money Tip of the Week:
Social Security in the First Year of
Retirement | October 2, 2013 | No. 156

Here is an article from Investment News – 

The trick of Social Security in the first year of retirement

Questions or Comments?

You can add comments on the blog, call 919-847-2981, or visit our web site. We look forward to hearing from you.

Mark Vitek, CPA/PFS, CFP®
…until next week.

Posted in Tax and Money Tip of the Week | Tagged , , , , , | Leave a comment