With all of the chaos that we are seeing bubble up around us, both in our nation and overseas, it can feel like everything is in flux.

Please, though … if you’ve established for yourself a hedge against financial turmoil, let’s not have you ruin it.

Last week, I posted an article which addressed these issues. It was a bit controversial, but I’m also glad to say that it was very well-received.

You see, in days like we’re facing, it might be a common temptation for my wealthy clients and friends to succumb to wrong thinking — the kind of thinking which they successfully avoided in order to attain the wealth they’ve achieved.

So, I had thought it appropriate to put together a small series on “right thinking”, when it comes to your resources, and this is the second part (of 2).

I’d love your thoughts, again, by the way…

Dennis Bridges on 5 MORE Bad Money Habits And How To Overcome Them (Part 2 of 2)
“Putting off an easy thing makes it hard. Putting off a hard thing makes it impossible.” – Charles E Wilson

As I mentioned last week, through the course of our work with many successful Greater Atlanta clients, I’ve made an unintentional — but close — study, over the years, of how money “works”, and just what it is that propels certain individuals and families into great quantities of resources … and what also brings them down.

I hate to see those with resources squander them, simply because they fell prey to the rampant fear.

Watch out for it in your own heart, in that of your children and spouse — and avoid these common behaviors of the poor:

6. Using credit habitually for “lifestyle” purchases: Delayed gratification isn’t something that they’ve heard of, and if they want something, they just put it on credit. After all — it’s at a 0% interest rate for the first 3 months! One purchase leads to another, and before they know it, they’ve got thousands in credit card debt. Debt loads in the wealthy can look different, but the principles remain the same. Avoid leverage these days; keep your powder dry. Your lifestyle isn’t worth expensive cashflow.

7. Always paying more than you have to: Often people who are broke have gotten there because they don’t know how to shop for a deal, negotiate or ask for a discount. You can get a discount on just about anything — from electronics to health care. Never pay more than you have to.

Why is it that the wealthy take perverse pride in paying full retail? It goes before the fall, as they say … so don’t become penny-wise/pound-foolish — but neither should you eschew effective negotiation in multiple categories.

8. Falling prey to lifestyle inflation and “keeping up with the Joneses”: This is a biggie for the wealthy. Even people with higher incomes have problems with staying ahead in their budget because they fall prey to lifestyle inflation. Instead of banking and saving raises, they raise their standard of living — buying a bigger, better house, a new car and a new wardrobe. They feel like they have to keep up appearances with everyone in their neighborhood.

Take a good hard look at what motivates your purchasing, and clean out the dustbunnies of comparison, lest they fill your brain with poverty-thinking.

9. Relying on others to fix your problems: We’ve probably all known someone who is always going to their parents, family or friends to bail them out. They create a pile of debt, and then rely on the kindness of others to get them out of their bind.

10. Forfeiting future gains for fun today: These people often have a hard time visualizing how saving and hard work will pay off down the road, and instead live for the fun and pleasures of today. They don’t realize how saving for tomorrow can improve their quality of life today.

Don’t sacrifice your retirement on the altar of present-ease.

Obviously, I’d like to help you move past these behaviors, if any apply. You may not carry every one of these traits, but just one or two can get you into hot water.

If you feel that you’re slipping into any of these bad money habits, please do let us know … we’re here to help as your Family’s Personal Financial Guide.

I am, warmly, yours,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

We spend a disproportionate amount of our time around the Team Bridges offices dealing with government forms and websites.

(Seriously though — can you or I get a gig as a web designer for the government? Those contracts run in the 7 figures … and the designs still look like something built using dial-up.)

But the annual release of this page is pretty fun: behold, the most popular baby names of 2014! (from our phone-and-form friends at the Social Security Administration) http://1.usa.gov/1HcO6ux

Now, moving from the sublime to the weighty: Sometimes it feels like all we face is turmoil. And this feeling is not restricted to those who live “month to month”.

This is especially true if we follow all the Facebook rabbit trails (at least the ones that don’t involve baby names) — it seems like much of the media is perversely incentivized to keep us discontent.

I have spoken of this before.

But it’s not just the media.

You see, I sit down every week with Greater Atlanta families across a wide spectrum of financial means, and sometimes I notice something interesting, even in the families of those with great resources: “poor” thinking.

With all of the seeming turmoil, it might be a common temptation for my wealthy clients and friends to succumb to this kind of wrong thinking — the kind of thinking which they successfully avoided in order to attain the wealth they’ve achieved.

So I thought it appropriate to put together a small series on “right thinking”, when it comes to your resources. It may be a bit controversial, but I do hope you receive it in the spirit with which I write…. (And, as usual, I’d love your thoughts!)

Dennis Bridges Reveals 5 Ways We Avoid Keeping Better Money Habits
“Success is to be measured not so much by the position that one has reached in life as by the obstacles which he has overcome.” – Booker T Washington

In my line of work, I get to have deep and meaningful conversations with families about the things which they most care about. I LOVE those conversations, and I believe that understanding these deeper passions is “the only way to fly”, when it comes to financial work of any kind (be it tax, or otherwise).

Now, as I do so, I also run into people’s attitudes about their wealth.

I’ve made an unintentional — but close — study, over the years, of how money “works”, and just what it is that propels certain individuals and families into great quantities of resources … and what also brings them down.

You see, sometimes the very wealthy begin to act like they’re poor.

It’s the beginning of a bad problem. And, it’s also something to watch out for in your children — because it will give you a clear picture about what might happen should you bequest your resources to them without a clear plan. I’ve compiled a group of behaviors characterizing the financially-strapped. Avoiding these pitfalls will help you keep better money habits.

You may have resources NOW, but are you …

1) … spending money on things you really don’t need?
I’m sure we’ve all got one of those friends who just loves to spend money, and buy things just to say they have them. The newest iPhone just came out? They buy it even though they already have an older version. A new TV came out with a higher refresh rate than their current one? They buy one so they can say they have the newest and latest technology.

That may be fine for a certain amount of time, but there is something deeper happening in the heart there, which, if left unchecked, can signal a decline in wealth. Because it starts with the iPhones … but where does it end?

2) … ignorant about where your money is going?
Far too often people who are broke find themselves short because they’ve never tracked their monthly cash flow and their small expenses are adding up to consume everything they bring in. They really need to track their expenses for a month or two so that they can set up a plan.

But the wealthy sometimes begin to believe that they’re immune to such proletarian concerns, and allow the same bad habit to encroach into their portfolio. Don’t let up — but, of course, don’t fall into obsession. (E.g., are you checking your accounts every day? That’s also a problem!)

3) … blaming your problems on outside forces?
People don’t like to see themselves as the source of their problems. While people certainly have problems that aren’t caused by something they’ve done, far too often they will also try to shift blame when they should be looking at themselves. They blame their friends, family and the government. They believe that “the little guy just can’t get ahead”.

Are you doing the same thing? “It’s the market’s fault!”, “My financial advisor screwed me over!”, etc., etc. … again, signals of a deeper problem.

4) … more interested in having others think you are wealthy, than actuallybeing wealthy?
People who are always broke like to be seen as wealthy and successful, even if looking that way to others means that they’re actually forfeiting the possibility of being wealthy in reality.

Are you pumping your resources into an image? Are you “investing” in items which, really, are more about how people will see you than how they will help your net worth?

5) … not planning ahead?
For the poor, money is short because they haven’t set up a family budget, and a saving and spending plan. When they set up a monthly cash flow forecast, and know exactly what they’re going to spend in what categories — they’ll do much better. If you fail to plan, you can plan to fail, right?

Again, many resources can lead to laziness in this area. Don’t let up with it.

I will have more to say on this topic next week.

Until then, I do hope you receive this in the affection with which I wrote it.

I am, warmly, yours,

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

I get pretty excited about the spring. All around the country, the snow is gone, the trees don’t seem so desolate … and am I right that the angle of the sun is a bit less harsh?

Or maybe it’s just because tax season has finished and I’m getting more sleep? 🙂

Well, I hope you and your family will have some “spring” this year — in the more figurative sense; whether or not it’s in the next couple of months. The winter always seems longer than it really is (even when it really *is* long!), but I’m also reminded of how necessary it is.

You see, like the lifecycle of an economy, I still believe that it’s a *good* thing to experience a time of dormancy. Speaking biologically, plants and flowers often need that time of “being withdrawn” to survive the “facts on the ground” (really cold temps).

It’s a classic picture of a healthy cycle — pull back a little when it’s harsh, but look for the warmer temps and be ready to bloom.

I don’t know all the details of your personal situation. But I do know that you and I have a choice about how we’re gonna weather our different financial seasons. Keep acting like it’s summer (when it’s really winter out there), and you’ll wither, and suffer for it.

But the opposite is also true — keep staying “shut down” and dormant when the weather is turning up … and, well, you’ll miss your chance to really grow up and blossom.

Fine — I’m a tax pro, not a poet, but you get the point. Don’t be afraid to step out again, just because it’s been cold for awhile out there.

And one of the best ways to KNOW if you can do this is to keep the essential information at hand …

Bridges’ 8 Essentials For Record Keeping
“Success is simple. Do what’s right, the right way, at the right time.” – Arnold Glasgow

Now’s the best time to get rid of unnecessary paperwork, as well as to ensure that you caught everything for your 2014 tax return.

But before I get to what to do if you find something pertinent to your recently-filed tax return, here are 8 essentials for record keeping (and how long to keep them)…

1. Taxes: Seven years
Bridges’ Reasons Why:
There are three, actually:
1) The IRS has three years from your filing date to audit your return if it suspects good-faith errors.
2) The three-year deadline also applies if you’d like to make some sort of amendment because you discover a mistake in your return and can claim a refund.
3) The IRS has six years to challenge your return if it thinks you underreported your gross income.
All this adds up to keeping that info for seven years. Beyond that, there’s no reason — except for posterity.

2. IRA contribution records: Permanently
Bridges’ Reasons Why:
You’ll need to be able to prove that you already paid tax on this money when the time comes to withdraw.

3. Bank records: Usually just one year
Bridges’ Reasons Why:
Those related to your taxes, business expenses, home improvements and mortgage payments will obviously need to be included for next year’s taxes. But unless there is some sort of emotional or posterity reason, get rid of everything after one year.

4. Brokerage statements: Until you sell
Bridges’ Reasons Why:
To prove whether or not you have a capital gain or loss for tax purposes; after this point, shred it.

5. Household bills: From one year to permanently
Bridges’ Reasons Why:
When the canceled check from a paid bill has been returned, you can shred the bill with a clear conscience. However, bills for big purchases — such as jewelry, rugs, appliances, antiques, cars, collectibles, furniture, computers, etc. — should be kept in an insurance file for proof of their value in the event of loss or damage.

6. Credit card receipts and statements: 45 days/Seven years
Bridges’ Reasons Why:
Some families don’t even bother to match up their statements, but if you do so, shred the receipts once you’ve verified everything. There’s no reason to keep everyday receipts beyond this point. For tax-related purchases, you need only keep the statements for seven years — after that, shred it, baby!

7. Paycheck stubs: One year
Bridges’ Reasons Why:
This is to verify that when you receive your annual W-2 form from your employer, the information from your stubs match. If so, shred all of the stubs … if not, request a corrected form, known as a W-2c. After that’s been handled — shred.

8. House/condominium records: Six years/permanently
Bridges’ Reasons Why:
You’ll want to keep all records documenting the purchase price and the cost of permanent improvements — such as remodeling, additions and installations as well as records of expenses incurred in selling and buying the property, such as legal fees and your real estate agent’s commission, for six years after you sell your home.

Holding on to these records is important because any improvements you make on your house, as well as expenses in selling it, are added to the original purchase price or cost basis. Therefore, you lower your capital gains tax when you sell your house.

Now, in this cleansing process, sometimes, you’ll find a receipt or a documentation which really would have changed your prior year tax return. That’s when you might have us file an “Amended Return“. However, this decision should be balanced against the cost of doing so, as well as the expected benefit — often these items can be dealt with the following year.

But here are some other, common reasons to amend…

* You neglected to report some income earned.
* You claimed deductions or credits you should not have claimed.
* You did not claim deductions or credits you could have claimed.
* You filed under one filing status, but you should have filed under another.
* You bought a residence and didn’t claim the First Time Homebuyers Credit (or other credits available).

If you find something like this, let us help you. (770) 984-8008

Regardless, let this be a cleansing process for you, and sleep easy knowing you’ve handled this stuff properly.

Oh, and make sure you use a good shredder!

And for those of our clients who have previous years’ tax returns at another preparer, OR for their friends…

+++++++++++++++++
“No Charge” Return Review
Special Offer
As a complimentary service this year, we will provide a Return Review To Any Non-Client. We will also review prior year returns from clients who did NOT have us handle their taxes during the year under question. No charge will be made, unless we have to file an amended return. Email our office (using the email button at the top of this page) or call (770) 984-8008 to set up this complimentary service!
Deadline May 8th
+++++++++++++++++

To more of your money staying in your wallet…

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

If your tax returns have been filed (as most of our clients’ have), I do hope you’ve taken the ripe chance afforded to you to scrutinize your year, and your financial health. And, even if you’re on extension, it’s good to pause here before summer and consider where you’re headed — financially, and otherwise.

So, I thought that this could be the perfect time to help our Greater Atlanta tax preparation clients through a little check-up.

(One nifty little tool I ran across last week might also encourage you in your marriage — or, well … it could perhaps give you fuel in that you are doing something worthwhile, even when it comes at a cost!

The stat site, FiveThirtyEight created an interactive graphic to help us see the implications of our tax policy on families (specifically, marriages). Enter you and your spouse’s income, and you can see whether your marital status is providing you a “bonus” or a penalty, under our current, convoluted tax regime. –>http://53eig.ht/1GABRri )

So, even including marital status in the mix, I’d like to give you an objective, “incentive-free” look at what your finances should look like when you hit the half-century mark. If you are close to that mark, I thought it might be useful for me to lay out the “perfect” scenario. If you’re on either side of it, you can see where you’re headed, or from where you should be coming.

And look — if you’re not perfect, at least let it be a benchmark…

[And don’t neglect what I’ve included at the end, especially where your friends may be concerned …]

Dennis Bridges Explores Five Markers of Financial Health at Mid-Life
“Don’t give up. Keep going. There is always a chance that you stumble onto something terrific. I have never heard of anyone stumbling over anything while he was sitting down.” – Ann Landers

Finances should be viewed as “clear-eyed-ly” as possible, don’t you think?

So, that being the case, let’s set up a landmark on our map towards financial health, shall we? It’s great to know where you should be headed … or, from what place you should be coming.

Here are five signposts for your mid-life financial life …

1) Your estate plan should be fully in place.

Of course, various assets are handled differently. This is the time to make a complete review of how your plan is put together, to ensure that EVERY asset (not just the tangible ones) are still handled properly.

Intangible assets can include such things as what you are passing down to your children in terms of “family ways” and values that you would like to see spreading down throughout your generations. This is an important step at midlife.

2) If college is paid for, consider dropping term insurance.

At this stage of life, it becomes more costly to pay for this service. You are probably at the point where your children are nearing the completion of their education.

Remember that you purchased “peace of mind” (term insurance is not an investment) so that if anything were to happen to you, your home and your children’s education could be paid for. If those things are now moot, it may be time to re-evaluate.

3) Evaluate where you are with your saving and investing.

You may not want to retire for quite some time yet. That’s a wonderful place to be. But you should be considering whether you have saved up enough to match your desired lifestyle spending. It’s a good rule of thumb that you should have saved about 8-10 times your annual lifestyle spending at this point.

If you haven’t?

4) Catch up on your savings.

At age 50, maximum savings in a 401(k) or 403(b) account increases from $18,000 to $24,000 in 2015 (it was $500 less for each amount in 2014). At age 50 or older, Roth contributions also increase from $5,500 a year to $6,500 with these “catch-up” provisions. If we don’t have eight times our lifestyle spending saved, now is the time to press these limits.

Of course, saving well is half the battle; investing well is the other half.

That’s a subject for another day.

5) Lastly, begin considering what you really want out of retirement.

Consider that living a life of purpose doesn’t necessarily mean decades of simple recreation.

Reaching the place where you don’t “have” to work is a wonderful marker of true financial success. But you can make the decision to view your retirement years as an opportunity to do new, meaningful work. Commit yourself to a non-profit, or a ministry endeavor. Find ways to strategically invest your time and your energy into a different work that matters (aside from your first-half career).

Although you can have that attitude at any age, it is especially powerful when redefining the second half of your life.

And don’t forget to email me (you can use the email button at the top of this page) a quick note about your experience with us this year! THANK YOU!

And for those of our clients who have previous years’ tax returns at another preparer, OR for their friends…

+++++++++++++++++
“No Charge” Return Review
Special Offer
As a complimentary service this year, we will provide a Return Review To Any Non-Client. We will also review prior year returns from clients who did NOT have us handle their taxes during the year under question. No charge will be made, unless we have to file an amended return. Email our office (using the email button at the top of this page) or call (770) 984-8008 to set up this complimentary service!
Deadline May 8th
+++++++++++++++++

To more of your money staying in your wallet…

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA

This is never a very fun “holiday”, but it’s worth marking every year.

Friday, April 24th is our National “Tax Freedom Day” — that’s the date by which you’ve finally worked enough days just to pay off your taxes for the year. The rest of the year is your “take home” pay, as it were. 🙁

This date includes payroll taxes, sales taxes, property taxes and, of course, INCOME tax.

The date varies year to year (this year it is one day later than last), and a whole variety of interesting data is right here: http://taxfoundation.org/article/tax-freedom-day-2015-april-24th

And for some states, the date is even later. Here’s the state-by-state breakdown:http://taxfoundation.org/sites/taxfoundation.org/files/docs/Map%20of%20Tax%20Freedom%20Day%20by%20State.png— that’s a useful snapshot, actually, of a fuller picture of whether “low tax” states actually are low tax (because it takes more into account than just income taxes) … and it might surprise you.

The calculating organization is the Tax Foundation, a non-partisan educational organization dedicated to informing US — the taxpayers — about the burdens of our tax liabilities. And according to the Foundation, here’s a fun little fact: Americans paid more taxes in 2014 than they did on food, clothing and shelter combined.

Which, of course, is why I and my Greater Atlanta tax preparation staff are here: keeping your tax bill as low as legally and ethically possible.

Regardless, here at Team Dennis Bridges we’re beginning the process of serving you during the “off season” (there are always many new tax law changes coming), and we’re evaluating how things went.

We also deal with lots of questions this time of year related to a variety of “post-preparation” issues (like “Where’s my refund?”), so I thought I’d address many of them in one swell foop ;).

Which is not at all to say that we won’t answer YOUR questions. Here’s our number: (770) 984-8008

On to the questions…

Dennis Bridges Answers “Where’s My Refund?”, And Other Questions For After Your Return Is Filed
“Friends are those rare people who ask how we are, and then wait to hear the answer.” – Ed Cunningham

The dust has settled around here at Greater Atlanta Tax Planning and Preparation Central, and your return is filed. At least, of course, if you didn’t file for an extension.

It does feel nice, even if more money was owed than you would like … because it *is* completed, after all.

But that doesn’t mean you may not still have questions. Here are some common ones we get this week…

1. “Where’s my refund?”

Well, the IRS does seem to have entered the 21st century.

If you had us “e-file” your return, you can check your status right now, or if you had us mail a paper return, after about 3 to 4 weeks.

When you’re checking with the following options, make sure you have a copy of your tax return on hand or know your “filing status”, SSN and the exact dollar amount of the anticipated refund.

• Online: Go to IRS.gov and click on Where’s My Refund.
[or go right to: https://sa2.www4.irs.gov/irfof/lang/en/irfofgetstatus.jsp ]
• Automated Phone: Call 1-800-829-4477 24 hours a day, 7 days a week for automated refund information.
• In-Person Phone: Call 1-800-829-1954 during the hours shown in your IRS form instructions. [Of course, the hold time for the IRS is … somewhat of an issue]

2. “Do I need to keep a copy of my return?”

Yes, for a *minimum* of three years, but I recommend forever. There’s all kinds of contexts where it’s useful. We do keep one on file, on your behalf, but it’s just smart and safe for you to keep one in a secure place at home. (I’ve already written about Amended Returns, and you need a copy for that process, of course.)

As for the supporting documents from your return, anything that relates to a home purchase or sale, stock transactions, retirement, business or rental property, should be kept much longer than the three years.

I’ll give even more guidance on this issue in subsequent weeks.

3. “I think there’s a mistake in my return. What should I do?”

Sometimes, you’ll find a receipt or a documentation after April 15th which really would have changed your prior year tax return. That’s, again, when you would have us file an “Amended Return”. Here are some other, common reasons to Amend…

• You neglected to report some income earned.
• You claimed deductions or credits you should not have claimed.
• You did not claim deductions or credits you could have claimed.
• You filed under one filing status, but you should have filed under another.

You might have other questions, which I haven’t addressed here. Let me know!

To more of your money staying in your wallet…

Dennis Bridges
(770) 984-8008
E. Dennis Bridges, CPA