The Heart Behind Year-End Giving – James Pantzis’ Three Key Ideas

The Heart Behind Year-End Giving – James Pantzis’ Three Key Ideas

Lost amid all of the Thanksgiving and holiday noise was the fact that a federal judge just blocked the implementation of the new overtime rules that small businesses were scrambling to prepare for this year. They had been scheduled to take effect on 12/1 of this year, but right now they’re in limbo. If your employer had already made changes in preparation for them, they may end up being rolled back. It remains to be seen whether this will be a permanent stoppage to the rule.

Either way, with December rolling at us, there’s sure to be a lot of last-minute financial items in the news, with Congress meeting in their “lame duck” session, and the normal flurry of year-end craziness.

For YOU, we don’t have much more time to do something meaningful for your upcoming tax bill.

By that I mean that we are ONE MONTH away from year-end. That’s one month away from taking positive (instead of reactive) steps to affect your 2016 tax burden (with the exception of IRA contributions and a few various backdating strategies that are allowed).

So here’s a quick and dirty tax plan:

1) Unless your income has radically changed this year (in which case we should probably talk), take a quick look at your withholding and make a last-minute adjustment up or down.

2) Then, consider the following before December 31 to reduce your tax liability …

• Making an additional mortgage payment (to add to the total you can deduct for mortgage interest)
• Adding to your 401(k) or other company-sponsored retirement plan
• Spending down your medical flexible spending account (FSA) balance
• Bunching deductible expenses, both miscellaneous and medical
• Maximizing the sales tax deduction with a tax-qualifying major purchase
• Considering ways to defer income until January 1 if at all possible (unless you already know 2017 is going to be higher)
And one more great strategy, which is my broader subject for today …

All of these (and more) are good options to make a dent in your 2016 tax bill. Help us help you to make the right decisions, and call: (718) 858-9864 to set up a year-end tax planning appointment.

The Heart Behind Year-End Giving – James Pantzis’ Three Key Ideas
“The world is more malleable than you think and it’s waiting for you to hammer it into shape.” -Bono

There’s something that happens to your soul when you cut a big check to someone in need.

You signal to those very fears and desires which so often control your unconscious thoughts: “Money doesn’t rule me. I have more than enough, so much more than enough that I’m giving it away.” Then, of course, something special often happens: more money seems to find itself in your hands.

I’m not advocating a mystical pay-it-forward scheme; I’m simply making the observation over years of being a student of how money “works”. And, “coincidentally” it just seems to find itself in the hands of those who give it away.

Why is it that those who are benevolent seem to be well-taken care of, even rich? I know many families of significant means who were NOT wealthy when they started to give in large percentages of their income (15%+). Coincidence?

So I’d say that this first dynamic is one significant reason to give: Your soul is set free from the shackles of fear and greed.

Here are two more big reasons:

2) You build a network of grateful friends and organizations. You’ll never know when someone to whom you’ve donated or given (be it time, money, connections, or other resources) comes back to you with something you need, at just the right time.

Personally, I’ve seen this dynamic in play enough times to not dismiss it. When you act or give generously, it’s the most powerful form of networking on the planet. Obviously, there are better, less self-interested reasons to give … but there sure are worse ones.

3) Your perspective can shift in an instant. When you don’t just give money, but also time and heart, you often learn heretofore unrealized reasons for being grateful about your own present circumstances.

Sometimes giving to Brooklyn institutions that work with the poor can bring home appreciation of your own enormous wealth. And it can also bring home awareness of a poverty which isn’t solved through adding zeroes to a bank balance. But either way, if you do it right, you are changed for the better.

With these reasons, AND the monetary benefits to your tax return, I urge you: stretch yourself this month. Give more than you think you should. See what happens.

I promise it’ll be good.

All this said, I firmly advocate for being careful with your planning of said giving. I don’t suggest impulsivity, just some measured risk-taking.

But don’t risk losing out on the tax advantages to gifting appreciated stock, or other, less common, forms of gifting. Shoot me an email, or give us a call ((718) 858-9864) if you want to discuss the tax implications of your year-end giving. It is, after all, what we do.

Warmly,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis’ Thanksgiving Encouragement

James Pantzis’ Thanksgiving Encouragement

This week of Thanksgiving seems like it hurtled its way towards us, and suddenly the holidays are upon us.

Perhaps it’s because of the elections, maybe the weather … but for some reason, it feels very sudden.

And that’s probably a good thing, because it’s our chance to take a breath as a nation, and look back. Even as we move forward.

Some of my Brooklyn clients are feeling more fearful now than they did a few weeks ago. Some are feeling just fine, even happy. Some are anxious over their finances (even those with much saved in the bank), and some are breathing relief in that area for the first time in a while.

The point is this: there is never a “perfect time” to pause and give thanks. Sure, it makes sense when something nice has happened in your life, but it’s just as important to do so when things look grim.

I’m reminded of how President Lincoln established Thanksgiving as a national holiday in the midst of a roiling civil war. He recognized the power of removing our eyes from that which might provoke fear and anxiety, and remembering the gifts that we might easily forget.

His entire Thanksgiving proclamation (written by his Secretary of State, William Seward) is worth taking in, or even reading aloud, but the opening is particularly powerful:

“The year that is drawing toward its close has been filled with the blessings of fruitful fields and healthful skies. To these bounties, which are so constantly enjoyed that we are prone to forget the source from which they come, others have been added …”

Personally, I’m grateful for YOU. I never want to take you for granted.

I’m grateful for the trust you give us to walk with you through sensitive financial waters, and for the opportunity you provide me to pursue a vocation that brings great pleasure to me.

I’m grateful to the people around me who make it even easier to serve you, and I’m thankful to live in a nation and an age in which I can post these kinds of personal notes, and that we get to enjoy a relationship of true meaning, even in the midst of transactional details.

As I gather at my table this week, I will be thinking of you, of Lincoln, and of a nation of many people with many stories, but all of whom can stop to be thankful.

And finally, on a “tax note”, allow me to remind you that although we are busy as we head into the end of the year, we will always make time to help you save on taxes. Give us a call at (718) 858-9864, and let’s get your 2016 tax return set up to save you the most that is legally and ethically possible.

Warmly,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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A Brooklyn Parent’s Four Step Guide On Teaching Money Management For Kids

A Brooklyn Parent’s Four Step Guide On Teaching Money Management For Kids

Now that the elections are over, we are all adjusting to the idea of President Donald Trump. Even typing those words is an odd experience (as it would also have been to type “President Hillary Clinton”) … we’ve had eight years of President Barack Obama, and however we feel about all of it, it’s always in our interests to approach the world as it really is.

Some of us are quite happy, some of us are quite upset, but at least we know that it’s going to be interesting! (Although I am reminded of the old Chinese curse: “May you live in interesting times.”)

I’ll have more to say about what we might expect from a tax policy standpoint as things become a little more clear. In the meantime, we have the “lame duck” Congress to wait upon, who will make some last-minute adjustments to the laws, as usual!

But regardless of how you feel, it’s my hope that (together) we can serve the world well … and that YOU will be in the strongest financial position possible, and with the most tax-efficient (and “tax-savings-est”) approach possible for the rest of this year.

That might only happen, however, if we have a conversation. Let’s make sure that your year-end is strong, and that you aren’t taken by surprise come tax time. Email me (you can just use the button in the upper-right of the site, above), or give us a call ((718) 858-9864) if you want to do some year-end tax planning before things get too crazy with the holidays.

And speaking of doing things well before they get too crazy, let’s talk about raising children, shall we? One of my favorite topics, specifically as it relates to instilling a great financial future…

A Brooklyn Parent’s Four Step Guide On Teaching Money Management For Kids
“The starting point of all achievement is desire.” -Napoleon Hill

Raising children is a white-knuckle roller coaster ride, and it sure isn’t easy. You can probably fill in the blanks with your own stories about how hard it is, and the particular challenges in our modern age. But still, those kids grow up, and most of them become (mostly) functional adults!

That said, I’ve seen so many otherwise loving and wise parents somehow forget to ready their children for the financial realities of adult life. Instead, they simply hand them credit cards, pack up their cars and head to school.

I’ll go out on a limb here, but I believe that it is this deficiency in financial education which has led, in part, to an adult population that largely spends beyond its means, engages in unsafe borrowing practices, and accumulates record amounts of debt.

Still, if we decide to instruct our kids how to responsibly manage their money — much like we teach them how to read, tie their shoes, and ride bikes — then perhaps they might avoid financial catastrophe in their own adult lives.

And sure, that all sounds good in theory, but let’s get practical: how exactly do you go about instilling proper financial values into your adolescents?

1) Tackle the task as if teaching money management for kids is like teaching your kids to ride bikes. You first need to let them get comfortable on training wheels, and prepaid cards are the training wheels of personal finance. So co-sign for prepaid cards, load a certain amount of money onto them biweekly, and allow your children to spend freely. This will force them to learn how to budget and, since most prepaid cards allow online account management, you will be able to review their purchases with them.

By the way, I did some research, and these are some good choices for pre-paid cards for teenagers, etc.

American Express BLUEBIRD: http://bit.ly/2fNQCgg
Visa UPside: http://bit.ly/2fNO5mq
American Express SERVE: http://bit.ly/heWJRS (monthly fee, with some advantages)

2) Once you are confident that your kids have exhibited responsible prepaid card use for at least a year, you can graduate to monthly cash allowances. This progression, which is tantamount to taking one training wheel off their bikes, will provide them with greater financial independence (given that you cannot monitor their spending with cash). It will also more thoroughly test their responsibility, because the odds of losing money or exhausting it too quickly are heightened with a monthly cash allowance.

3) If your kids demonstrate the requisite discipline after a year of cash allowances, you can take the other training wheel off. Do so by co-signing for and opening checking accounts in their names and depositing slightly higher monthly amounts while requiring them to pay for more of their own expenses.

With checking accounts, children will garner much needed experience writing checks and purchasing with debit cards. They’ll learn how to avoid overdrawing their accounts and bouncing checks —  and if they can’t learn these lessons quickly enough, you can screw that training wheel back on and regress to cash spending. After all, when you took that last training wheel off, you didn’t let go of the bike completely! You still had a grip on the handlebars and were providing assistance as needed.

4) If your kids’ financial balance seems solid after 6-9 months, you can release the handlebars and either co-sign for student credit cards or give them small lines of credit as authorized users on your credit card accounts. Doing so will help teach them the principles of responsible credit use, such as spending within one’s means and paying bills in full each month. Remember though that you are simply taking your hands off to see if your kids can ride. If they wobble, catch them.

If you don’t believe in using credit cards, then there are additional steps of “release” that might make sense, like ceasing allowances altogether, and encouraging them to pay for their own minor expenses from the proceeds of their own earnings.

This financial education progression will instill within your children various skill sets that will surely serve them well when they leave the nest. It’s important to employ such a practical approach because it lets kids learn and inevitably falter while the stakes are low.

Additionally, you can ensure that your children know how to handle their money before becoming independent, providing yourself with the kind of peace of mind that is valuable to any parent.

So before sending your kids out into the world, make sure they are ready for the financial implications of that independence.

And once again, allow me to remind you that although we are VERY busy right now as we lead into the end of the year, we always have time for you. Give us a call at (718) 858-9864, and let’s get your 2016 tax return set up to save you the most that is legally and ethically possible.

Warmly,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis’ Story of Real Wealth

James Pantzis’ Story of Real Wealth

I’m specifically putting this together on Monday, November 7th, before Election Day, before we know the outcome of our long national sojourn. So many have been writing things like “I can’t wait for this election to be over!” and I have felt the same.

But now is when the real work begins.

Again, today is Monday. These words are from BEFORE anything was known of the outcome, so you know they’re coming without any kind of dog in the fight, so to speak. That’s always been my professional posture, and it will continue to be.

So, regardless of who is/becomes our President-Elect, it’s time to lay down our weapons for a while, and do the hard work of healing after all of the shouting is finished.

And by the way, do you want to know who I voted for?

I voted for YOU. My vote has always been with the ones who are out there clawing and scrapping, who are working jobs and running businesses, and who need a little encouragement and help along the way. That’s really how we see ourselves here at Team Pantzis.

>>Before I get to what I’m writing about today, a quick reminder that open enrollment for the Affordable Care Act healthcare policies started on 11/1. You will need “minimum essential coverage” in order to avoid the increasingly-significant penalties, come tax time.

So, in the spirit of the above, I’d like to tell you a story today about real wealth. Wherever you find yourself, I hope it helps.

James Pantzis’ Story of Real Wealth

“My interest is in the future because I am going to spend the rest of my life there.” – Charles Kettering

A rich farmer liked to ride around his vast estate so he could enjoy his great wealth. One day, while riding his favorite horse, he saw Hans, an old tenant farmer, sitting under a tree.

Annoyed because Hans wasn’t hard at work, he halted his horse and asked, “What are you doing there?”

Hans replied, “I was just thanking God for my meal.” And the farmer saw Hans eating a modest lunch of rice and beans.

“If that was my lunch, I wouldn’t be giving thanks for it,” the farmer said.

“It’s all I have,” said Hans, “but it’s all I need, so I give thanks.”

The farmer was about to ride on when Hans called out to him. “I thought I should tell you that I had a dream this morning. A voice said to me, ‘The richest man in the valley will die tonight.’ I just thought you should know.”

The farmer rode away, but Hans’ words worried him. He was the richest man in the valley, wasn’t he? So he called his doctor when he got back to his mansion. The doctor came out and looked him over, but found nothing wrong with him. The farmer went to bed, still worried, and slept fitfully.

When he woke the next morning he thought, “Well, there was nothing to that dream after all. Here I am, alive and well.”

Then a servant knocked at his door. “What is it?” the farmer asked.

“It’s about that old tenant farmer, Hans, sir,” the servant said.

“What about it?”

“He died in his sleep last night, sir.”

And once again, allow me to remind you that although we are VERY busy right now as we lead into the end of the year, we always have time for you. Give us a call at (718) 858-9864, and let’s get your 2016 tax return set up to save you the most that is legally and ethically possible.

Warmly,

James Pantzis

(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis’ Breakdown of the Candidates Tax Plans

James Pantzis’ Breakdown of the Candidates Tax Plans

As I promised, I have some information for you about the broad strokes of the potential income and business tax policies of our candidates for President this year. It’s obviously a politically-charged issue, and so I’ve drawn from my own analysis, as well as the nonpartisan Tax Foundation.

But I also hope to turn down the temperature on this issue to remind you that we are not electing a monarch. The genius of our founders is that our governmental system is designed not to invest too much power into one branch of the government. The “checks and balances” are a very good thing.

And yes, that doesn’t mean that presidential elections aren’t important … only that no woman or man in the office of President can purely dictate their will in the area of tax policy. It’s the role of Congress to write the laws, after all.

Hopefully, we can all remember this after the election results, and perhaps keep calm … and soldier on, whatever the results.

(And I know, I know — theory isn’t always practice. There are problems with our system, and with how it has evolved over the years. But let’s all have the humility to realize that none of us sees everything as clearly as we think we do.)

Now, this will have to be brief, but here’s a rundown of the candidates tax plans, as promised:

James Pantzis’ Breakdown of the Candidates Tax Plans

“There is much pleasure to be gained from useless knowledge.”  -Bertrand Russell

Again, since Presidents are not responsible for writing tax policy, these plans indicate more about their respective visions for government, and how Mr. Trump or Mrs. Clinton would work with Congress to enact their particular visions. Neither one, if elected, would be (by law) vested with the power to make all of this happen by the stroke of a pen.

That said, here are the broad strokes of what I have been able to gather about each of their visions for government and tax policy. And a necessary disclaimer: all of this is subject to change, and further, won’t perhaps represent the totality of their vision.

Clinton’s Tax Plan

Essentially, Clinton’s vision calls for an increase in the funding for the federal government, and attempts to do so without raising taxes on the middle or lower income brackets for individuals. She makes up for this by seeking to raise taxes further on larger businesses and high income tax filers.

For a more detailed analysis, as well as a variety of specific provisions, you can see the Tax Foundation analysis of Mrs. Clinton’s proposals right here.

Trump’s Tax Plan

Donald Trump seems to bring a different vision of the federal government into his proposed tax policies. Essentially, he calls for a decrease in the funding of governmental activities by reducing the “progressive” nature of the income brackets in lowering the higher percentages levied upon higher-income taxpayers, and on businesses of all sizes, and by eliminating the estate tax.

For a more detailed analysis, as well as some specific provisions (though less specific than Mrs. Clinton’s), you can see the Tax Foundation analysis of Mr. Trump’s proposals right here.

Lastly, the Tax Foundation has created a (VERY basic) calculator to determine what, if any, impact each of these plans might have on your taxes right here.

But you know what would have the BIGGEST impact on your taxes? Planning ahead, and taking action on your own.

And that’s what we’re here to help you do.

Warmly,

James Pantzis

(718) 858-9864

James Pantzis, CPA, PC

 

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9 Questions For Brooklyn Taxpayers To Consider for Tax Planning

9 Questions For Brooklyn Taxpayers To Consider for Tax Planning

I wanted to put this on your radar before the next few weeks, when (apparently) our nation (and perhaps even our little village of Brooklyn) will be going down in flames.

If we are to believe either/both sides of this nasty election, if Trump/Clinton steals/wins/loses the election, then we will have chaos/civil-war/armageddon and life/politics/Facebook as we know it will be coming to an end.

However, before all of that turmoil and during this season of relative calm, let’s you and I — yes, YOU, the Brooklyn taxpayer looking for the best tax professional — make a plan for your 2016 taxes that will set you up for longterm success. In fact, there may be a few moves we can make that can help your tax hit before we’re forced into “reaction mode” — which is the only mode out of which after-the-fact tax work can be done.

So I’d like to change that paradigm for you by having you answer a few short questions for me…

(The best thing to do is to cut and paste these questions into an email and send them to my Team Pantzis office using the email address on our site.)
1) Have you had a significant change in your wage income this year?

<Put YOUR answer here in your email>

2) Have you taken capital gains or losses this year? Are you planning to?

<Put YOUR answer here in your email>

3) Did you start or sell a business in the Brooklyn Area (or outside) this year?

BONUS QUESTION: Do you know anyone who did, that would like input on their tax situation?

<Put YOUR answer here in your email>

4) Did you purchase real estate?

<Put YOUR answer here in your email>

5) Did you make your full contributions to retirement accounts?

<Put YOUR answer here in your email>

6) Have you considered a Roth IRA?

<Put YOUR answer here in your email>

7) Did you withdraw from retirement accounts, and for what purpose?

<Put YOUR answer here in your email>

**8) Have you sent your family and friends our way — and, if not, is there something which we can help you with to make this easier?

<Put YOUR answer here in your email>

9) Are there any other tax or financial (or other) issues you think we should know about?

<Put YOUR answer here in your email>

Now — your answers to these questions form the “tip of the iceberg”, and they will help us to know which direction to take as we work with you over the next two months to prepare for year-end. With your permission, we’ll contact you back, as appropriate, and set up a time to discuss them further with you, whether by phone or other method.

I hope to see you in here soon.

Warmly,

James Pantzis

(718) 858-9864

James Pantzis, CPA, PC

 

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Four Key Recordkeeping Principles For Brooklyn Families To Protect You In The Case Of An Audit

Four Key Recordkeeping Principles For Brooklyn Families To Protect You In The Case Of An Audit

Well, our “extension season” is behind us (as of Monday the 17th), and we here at Team Pantzis can finally turn our full attention to what’s coming down the pike in 2017.

 

With the election brewing around us, Congress isn’t doing *anything* right now about tax legislation … so, as usual, there will be some last-minute treats for us by the end of the year in the tax code. But the very good news for you (and all of our Brooklyn tax preparation clients) is that we pay close attention to these things so you don’t have to.

 

And it’s a good thing we do pay attention. Many of our clients have never received that dreadful notice from the IRS, initiating an audit — or, much worse, the KNOCK on the door! If you never have, you probably don’t keep much financial documentation.

 

If you have, you are probably terrified to part with a single receipt.

 

But remember, either way, we’re in your corner.

 

However, the IRS is one of the few courts where failure to produce proof of your claims results in the assumption that you are guilty of tax fraud.

 

(This is part of the reason why you ALWAYS want a professional on your side in these matters. Would you go to court without an advocate? Would you go before a court with a software-generated defense? “Your honor, here is my lawyer, Siri.”)

 

So, during these days of uncertain future, it’s imperative that you are able to protect yourself. And, as great as we are — some of this still does fall in your court. That’s why you must save all the financial documents used to create your tax returns in order to defend yourself in the case of an audit.

 

And with 2015 returns now firmly in the books, let’s look ahead and ensure that you are handling your records right.

 

Four Key Recordkeeping Principles For Brooklyn Families To Protect You In The Case Of An Audit

“If you don’t have time to do it right, when will you have time to do it over?” – John Wooden

 

1.) Firstly (and perhaps this goes without saying), retain a paper copy or receipt of any tax-relevant transaction. Scan these documents and archive them electronically, or acquire them in an electronic format. If the purchase has a manual or warranty, store all the documents in the same electronic and physical location.

 

Sadly, the IRS has ruled bank or credit card records to be insufficient documentation. As a result, just keep your statements long enough to reconcile your account.

 

If the purchase was a business or tax-deductible expense, record the expense and why it justifies the deduction. Store this information with or on the receipts.

 

2.) Second, keep brokerage statements indefinitely for taxable accounts. You are responsible for reporting the cost basis of any security you sell to calculate the capital gains tax. For a mutual fund with 30 years of reinvested dividends, each dividend payment is part of the cost basis. As a result, the cost basis can sometimes be computed only if you have the complete transaction history.

 

Without knowing the cost basis, the IRS could argue that the entire value of the investment be treated as gain.

 

If you have lost the record of how much you originally paid for an investment, instead of selling and paying 15% or more of the value in taxes, you can use that investment as part of your charitable giving. Gifting appreciated stock avoids the tax owed and still qualifies for a full deduction. Oddly enough, the IRS still asks for the original purchase date and price for gifted securities, but leaving these blank has no effect on your tax owed.

 

Many custodians keep several years of electronic copies of brokerage statements available. And they are now required to send any known cost basis electronically when you transfer securities to a new custodian. If your current custodian has the correct cost basis of your securities, you probably no longer need to keep brokerage statements. However, an approach of “better safe than sorry” is always advisable with the IRS.

 

3.) Third, keep IRA nondeductible contribution records forever. You may need those records every year that you withdraw money in retirement to show that a portion of the withdrawal is not tax deductible.

 

Or to avoid the hassle, clear out nondeductible IRA contributions by converting all of your IRA accounts to Roth accounts.

 

4.) Fourth, keep partnership documents, contracts, commission or royalty structures forever. This includes property records, deeds and titles, especially those relating to intellectual property. It also includes any transfers of value for estate planning purposes.

 

Finally, save all of your tax returns. After you file, save the paper and/or electronic copies with the rest of that year’s financial documents.

 

Tax returns and all the supporting documentation must be kept at least seven years. The IRS can audit your return for up to three years from your filing date. However, the three-year limit only applies to good-faith errors.

 

If the IRS suspects you underreported your gross income by 25% or more, they have up to six years to challenge your return. And because you may file for an extension at the October 15 deadline, you must keep your records for at least seven years.

 

Regardless of those rules, though, if the IRS suspects you filed a fraudulent return, no statute of limitations applies. Because the IRS is run and organized by fallible people (with all of their attendant biases, emotions, etc.), we suggest keeping your tax returns and documents forever.

 

Unfortunately, whenever the IRS challenges you, the burden of producing evidence that your claims are true rests entirely with you, so you had better have your documentation in order.

 

Taxpayers collectively spend six billion hours, or 8,758 lifetimes, annually trying to comply with the tax code. Fortunately, as I previously mentioned, YOU don’t have to be the one to do all the heavy lifting. We are on your side…

 

Warmly,

James Pantzis

(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis’ Key To Raising Rich Kids

James Pantzis’ Key To Raising Rich Kids

In a few weeks, I intend to post here a look at the tax policies being proposed by each presidential candidate. Much of it is “campaign bluster”, but some of it does show how each of them might affect your wallet, and mine.

In the meantime, there’s a lot of argument and news these days about them releasing their personal tax returns, finding new things that could be hidden, etc. — but it all kind of makes me laugh a little. OF COURSE both Donald Trump and Hillary Clinton used every legal and ethical “loophole” they could possibly use. Sure, one or both of them may have gone beyond those bounds … but the fact remains (and this is something I’ve often said): there are two tax systems in this country:

1) One for those who pay attention and USE the tax code as it’s designed.Poorly-designed as much of it is, it rewards diligence in keeping track of it.

OR

2) Another system for those who use their own software, or “any johnny tax preparer” down the block.

Happily for you, you’re on the better side of that equation.

As a Brooklyn tax professional, it’s my job to help YOU use the tax code well and save you and your family from having to pay too much, or from not receiving your best deal from Uncle Sam.

Speaking of taxes — a few big reminders: October 17th is the deadline to ensure your 2015 (extended) tax return is filed! It’s also the deadline for contributions to self-employed retirement accounts and for a Roth recharacterization.

Finally, moving on to my topic of the week, I thought I’d pipe in on the number one habit I’ve seen in those who eventually grow to be wealthy. It may not (or it may) be what you think, and I’d love to see all of us help our children learn this habit…

James Pantzis’ Key To Raising Rich Kids
“Success is nothing more than a few simple disciplines, practiced every day.” – Jim Rohn

Sadly, too many Brooklyn families neglect a critical aspect of raising children: teaching them to be financially savvy. That said, many clients have written to say that they read and discuss my financial notes at the dinner table with their children. That’s a nice start.

But if you want to raise rich kids who can create and manage wealth, there are a handful of critical rules that are foundational.

Here’s the main one: Postpone spending.

In economics, “deferred consumption” is the very definition of wealth and capital. So … defer your consumption, kids! Everything you don’t spend today is wealth. Only what you don’t spend today is available for investing. And since money makes money, what you don’t spend today can provide a lifetime of income to spend in the coming days.

Teach them this: Wealth is what you save, not what you spend.

Most of the younger generation is under the false impression that wealth is based on the luck of a big salary. Nothing could be further from the truth. According to the now-classic book The Millionaire Next Door by Thomas J. Stanley, the affluent tend to answer ‘yes’ to these three questions:

1.) Were your parents very frugal?
2.) Are you frugal?
3.) Is your spouse more frugal than you are?

So how did they build their wealth? According to Stanley’s research they did it slowly, living well below their means and investing about 20% of their household income each year. And because money makes money, over time, they grew gradually richer and richer.

Imagine you purchase a pair of shoes for $50 every year (obviously, some are more expensive, some are less — the point is the analogy here). The person that makes do with the old ones and only buys shoes every other year will be able to save and invest the difference. After seven years and at a normal interest rate, their savings will be earning enough interest to pay for a new pair of shoes every other year. After eleven years, the interest from the investment will pay for the cost of buying new shoes every year, forever.

Because being frugal early in life produces great wealth later in life.

Due to the seeming wealth of our American culture, it is difficult to learn to distinguish between needs and wants. Very few purchases are “needs”. Other than food, shelter and clothing, everything else is optional. In the United States, we show our extravagance even in these three essentials.

Practically speaking, you can learn to postpone spending one purchase at a time. When our children were very young, we required them to wait one week before spending money on a toy. Often, after waiting a week, they wanted a different toy instead. Then, they had to wait another week for that purchase.

Simply learning to delay and avoid impulse buying can cut your children’s spending in half.

So teach your children: Wait now … profit greatly later.

Warmly,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

 

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James Pantzis’ Six Steps For Dealing With Errors On Your Credit Card Statements

James Pantzis’ Six Steps For Dealing With Errors On Your Credit Card Statements

I write these notes on Mondays, and as of today, we don’t yet know what kind of drama (if any) will occur during the presidential debate set for tonight.

But regardless of all the political posturing, we’re all facing so much emotion these days. From the Terence Crutcher shooting, to the unrest in Charlotte, and all over the American map, it still just seems like our wounds are defining us. There are problems needing to be fixed, and it all seems so big.

Perhaps a place that we can all start would be by taking a look in the mirror. And we can pray/pause/consider a little more deeply. Maybe if we start right there first, we will have a better idea of how we can effectively engage in the absolute best way possible.

Moving on to the tax stuff, there’s a new scam making the rounds, and it involves emailing taxpayers a fake notice requesting information about healthcare coverage. This should be the first red flag: The IRS almost never initiates contact with taxpayers by emailing them and attaching their correspondence to an email.

Here’s an example of the fake notice: http://bit.ly/2cytioK

If you receive this scam email, do not respond and do not open the attachment. Forward the email to phishing@irs.gov and then delete it.

Dealing with this kind of junk is never fun. And recently, I had an experience that you probably have dealt with as well: challenging a bill that is simply incorrect.

It’s a symptom of our modern world, and if you aren’t keeping a close eye on your credit card statements and the bills that come through your mailbox, it might be too late. But there’s a way to go about it that is almost certain to bring results…

James Pantzis’ Six Steps For Dealing With Errors On Your Credit Card Statements
“Tact is the ability to describe others as they see themselves.” -Abraham Lincoln

Dealing with a billing error can be frustrating. But giving up too quickly will only cost you money. I’ve learned this the hard way, and many of my clients and friends might benefit from what I’ve learned.

So, if you’ve got an erroneous bill to settle, here’s what to do:

1.) Write a polite letter. Control your irritation if you want results. Describe the problem and ask for help. Customer service personnel will be more willing to work with you if you don’t attack them.
2.) Follow the chain of command. Addressing a letter to the CEO of a bank, for example, may only delay a resolution. Start at the bottom, and work your way up until the problem is resolved.
3.) Write within 60 days of receiving the erroneous bill. The Fair Credit Billing Act will protect you only if you follow its limits. That means writing to the company within 60 days after the bill was sent to you.
4.) Give full information. Include your name, address, account number, a brief description of the problem, and copies of the sales slips and other documents that support your claim. Try to keep the letter to a single page.
5.) CC a regulator. If you show that you’re sending a copy of the letter and documents to the Comptroller of the Currency or the Federal Trade Commis­sion, you signal that you mean business.
6.) Confirm delivery. Send the letter by certified mail with return receipt.

Much of what we do around here at Team Pantzis comes down to going to bat on behalf of our clients and making sure that they aren’t getting taken to the cleaners. The above is just a few points from our methodology.

The best advice? Have a professional in your corner.

Warmly,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

 

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Seven Free Tips For Identity Theft Protection For Brooklyn Individuals & Families

Seven Free Tips For Identity Theft Protection For Brooklyn Individuals & Families

With the recent bombings in New York and New Jersey, the nation seems (once again) to be on edge, and the news channels are (once again) analyzing non-stop the ramifications of it all, what should have been done, what could be done, etc. Fear can run rampant within us if we don’t guard our mind.

I’ll leave the analysis to others, when it comes to how best to secure against these kinds of attacks, and stay in my lane as the person who gets to help you secure against different kinds of dangers (of the financial and taxation kind).

And we pray that justice is done, and the perpetrators of this terroristic garbage are dealt with properly.

In the meantime, let’s do what *we* can do to shore up against those other kinds of thieves I mentioned, about which I have some thoughts today.

But before I get there, a couple reminders:

1) October 17th is the due date for extensions. Less than a month out, so let’s make sure everything on your end is handled. If we’re waiting on you, get your information to us ASAP.

2) That day (10/17) is also the deadline to fund a SEP-IRA or solo 401(k) for tax year 2015 if you requested an automatic extension of time to file. It’s also the deadline for “recharacterizing” a Roth IRA that you converted from a traditional IRA, back to the traditional format for tax purposes. If you converted one this year, we can take a look at whether it might make sense to undo that conversion.

Now, back to financial security. I’ve written in the past about personal online security, but keeping your affairs secure involves more than simply not falling for online scams. Here’s what I mean (and it’s short and sweet) …

Seven Free Tips For Identity Theft Protection For Brooklyn Individuals & Families
“Not until the pain of the same is greater than the pain of change will you embrace change.” -Dave Ramsey

Yes, commonly-advertised identity theft protection services for regular Brooklyn families can seem like an easy button. But the problem is that many of these products are unnecessary or ineffective, or they duplicate things you can do yourself — for free.

Here are some basic things you can set into place right now, which will cover you in the vast majority of circumstances:

1) Please don’t carry your SSN in your wallet. Ever.

2) Don’t post your full DOB on your social profiles. If you really like the messages on your wall for your birthday, just take out the year at least. (Besides, it makes you more mysterious.)

3) Don’t check your bank balances on public wi-fi.
Even if you do it on a secure connection, hacker programs to “snift” your info are as commonly-accessible as pirated video on the internet. This includes your mobile phone.

4) Um, don’t let your wallet get stolen.

5) In case it does, keep a photocopy of every important item in there.
(Except cash, of course. That’s, well, against the law.)

6) Check your credit annually.
www.AnnualCreditReport.com is the one where you don’t have to pay for it.

7) Shred important stuff you don’t need — including credit card solicitation offers. In fact, you can stop those solicitation offers for good by going here: www.optoutprescreen.com or calling 888-567-8688. Opting out should stop most offers, and it’s free.

There. I said it would be short, sweet, and full of common sense.

Don’t forget — we’re only a phone call or email away, and our consistent question for you is this: “What more could we do for you, to help?”

Warmly,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

 

 

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