James Pantzis’ 4 Secret Financial Tips To Start Using Today

James Pantzis’ 4 Secret Financial Tips To Start Using Today

Meeting with clients for mid-year planning sessions the past few weeks has been wonderful.

No — really! And yes, I know, I should get out more.

The reason we enjoy doing this (especially this time of year), is seeing that look on our clients’ faces when we identify tweaks and quick moves which can bring a significant ROI on their tax return for their effort and time… well, it’s worth all of the time we’ve put into learning this craft.

Sometimes during these meetings, I find myself sharing some of the private details of how I think about taxes, finances and investing for my OWN family. Yes, I do try to practice what I preach in these Notes to my clients and friends. (And yes, believe it or not, I do have a private life outside of tax forms.)

Enough people have told me that these back-of-the-napkin principles which I share have been helpful, that this morning I’ve been motivated to put some of them down for you in easy-to-digest form.

So, without further ado, here are some of James Pantzis’s ‘secret’ financial tips…

James Pantzis’ 4 Secret Financial Tips To Start Using Today
“The only person who is educated is the one who has learned how to learn and change.” – Carl Rogers

Whether you’re running a Fortune 50 corporation, or just trying to keep your household expenses from exceeding your salary, the same basic financial concepts which I use in my personal life can apply to yours. In my practiced opinion, these are fundamental building blocks for wise financial decisions.

You almost don’t need much else besides these four ideas (almost)…

1. Quick Interest Calculations: The Rule of 72.
Want to double your holdings? The Rule of 72 can tell you how long it will take, based on the specific interest rate you’re looking at. Just divide 72 by the interest rate.

For example, if you’re looking at an investment with an interest rate of 6 percent, then 72 divided by 6 gets you an answer of 12 years.

This is a rough estimate, of course, but it’s pretty effective.

In fact, you can also turn the equation around to determine the interest rate you’re looking at if someone promises to double your returns in a set amount of time. Twice as much money in 12 years? Divide 72 by 12 and you get an interest rate of 6 percent. This rule lets you evaluate investment opportunities quickly and decide where to put your money.

2. Opportunity costs.
What do you need to give up in order to get something you want? It’s almost always a question of money, but also one that involves time and value.

Pursuing an advanced degree may take years — are you willing to put in that amount of time? Will a sports car give you enough enjoyment to offset going into debt for it?

Whatever decision you end up making about how you are investing your money, should also be applied to how you think about your time. Sometimes it really does pay to invest in a lawncare service so that you can free yourself up to do more “valuable” work on behalf of your family.

3. Sunk costs.
This is money you can’t get back — a non-refundable airline ticket, for example. The idea here is that you need to keep sunk costs in the proper perspective. It’s easy to start thinking “Well, I’ve already spent $100, what’s another $25?” You’ve got to be willing to walk away sometimes.

Once something is paid for, and cannot be refunded, it shouldn’t impact your future financial decisions. It is a “sunk” cost, i.e., water under the bridge, and whatever you do in the future won’t ever get it back.

4. Time value of money.
According to this principle, a dollar you receive today is worth more than a dollar you’ll get tomorrow. You’ll have opportunity to invest that dollar immediately and begin earning more revenue from it (and also avoid losing value because of inflation).

Again, this helps you make certain calls about your purchases — and your income. It’s the old “a bird in the hand” theory in action for your wallet.

These four financial tips have served me well over the years.

Are there any that you think I have missed? Do you have questions? I’d love to hear from you, so shoot me an email with your thoughts (simply click the button at the top of this page to email me).

Warmly (and until next week),

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis’ Eight Reasons For Having an Estate Plan

James Pantzis’ Eight Reasons For Having an Estate Plan

A couple weeks back (after Independence Day), I wrote about the shared covenant we are blessed with in our nation. Our Constitution and our laws form a different kind of bond than what was ever seen, at least at the time of our nation’s founding.

(Speaking of blessings — did you see that video over the weekend of the surfer in South Africa who beat off a Great White shark attack? http://cbsn.ws/1gK9uMF Scary stuff … so glad he is alright. That’s probably one reason why I’m not a surfer. There may be others.)

Despite all of the seeming chaos we are subjected to by the likes of our national media, we should remember how unique and effective our system of government has been over the years.

Yes, we have some stupid laws … but we also have some very good ones.

And some of these, by the way, are concerned with the ordered and proper passing along of our assets to our family, friends and future generations. We shouldn’t take for granted how important this is — in many nations, it’s a much more chaotic process, and is sometimes even handled without law whatsoever.

So, in accordance with our flawed-but-excellent estate laws, it really makes sense to recognize the necessity of a plan.

We’d love to help you in any way that we can in this process, and we’ll even recommend some excellent outside help if it comes to that rare something that we aren’t best able to handle.

But sometimes we have to remind ourselves exactly why we should be going to the trouble in the first place …

James Pantzis’ Eight Reasons For Having an Estate Plan
“It is not enough to stare up the steps, we must step up the stairs.” – Vaclav Havel

Many well-meaning families think an estate plan is for someone else, not them. They may rationalize that they are too young or don’t have enough money to reap the tax benefits of a plan. But as I would like to make clear, estate planning is for everyone, regardless of age or net worth.

Here are my EIGHT reasons why you should consider putting this into place right now…

1) Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan, the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney).

2) Minor children. Who will raise your children if you die? Without a plan, a court will make that decision. With a plan, you are able to nominate the guardian of your choice.

3) Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse, and to the children from a prior marriage or marriages.

4) Children with special needs. Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits, and may have to use his or her inheritance to pay for care. With a plan, you can set up a Supplemental Needs Trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.

5) Keeping assets in the family. Would you prefer that your assets stay in your own family? Without a plan, your child’s spouse may wind up with your money if your child passes away prematurely. If your child divorces his or her current spouse, half of your assets could go to the spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and, for example, pass to your grandchildren.

6) Financial security. Will your spouse and children be able to survive financially? Without a plan and the income replacement provided by life insurance, your family may be unable to maintain its current living standard. With a plan, life insurance can mean that your family will enjoy financial security.

7) Retirement accounts. Do you have an IRA or similar retirement account? Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes, and may result in burdensome tax consequences for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). With a plan, you can choose the optimal beneficiary.

8) Avoiding probate. Without a plan, your estate may be subject to delays and excess fees (depending on the state), and your assets will be a matter of public record. With a plan, you can structure things so that probate can be avoided entirely.

I hope you do carefully consider these elements, and let us know how we can help. We would love to be a part of your generational assets being preserved rightly.

Warmly (and until next week),

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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Halftime Tax Adjustments for Brooklyn Taxpayers

Halftime Tax Adjustments for Brooklyn Taxpayers

I have an action item for you in a moment, but before I get there, allow me to explain…

You see, one of the projects toward which I devote my time during the summer, is expanding my financial intelligence. I’m not just referring to learning more technical moves, or adding more letters after my name.

Instead, I want to learn how money works.

So, I’ve been going through this book: How Rich People Think by Steve Siebold (http://amzn.to/1eWMFUF), and it’s right on the money (bada-bing). For example, here are some traits his book identifies among the rich, as opposed to the middle class:

* Rich people focus on earning, not saving
* They understand that leverage creates wealth, not hard work
* See that they are in control of their wealth, not luck or fate
* Know that money is earned from focused thought, not hard labor
* Don’t see money with emotion, but with logic
* Are Action-Takers (as opposed to having a lottery mindset)

So why do I emphasize that last one? Simple — I’m suggesting you take an action now, which could have a big difference on your 2015 bottom line…

Halftime Tax Adjustments for Brooklyn Taxpayers
“My favorite things in life don’t cost any money. It’s really clear that the most precious resource we all have is time.” – Steve Jobs

You know how good coaches are usually famous for making adjustments during the halftime of big games? Well, here I am — acting as your financial coach in matters tax-related, and we’ve just about hit the halftime mark for 2015.

You have six months of financial info to use for some quick math about your year as a whole, and to prepare for a pleasant upcoming tax season.

To begin, all you have to do is take your cash flow for the first half of the year, and multiply by two. Add up your wages, dividends, interest, and any other income, and then–if this represents approximately what you’re expecting for the second half of the year — double the sum.

Once you have your estimated 2015 income, you can give us a call: (718) 858-9864 (or send me an email by clicking the button at the top of this page), and we’ll help you determine the appropriate tax rate and deductions to apply. Because once you’re armed with this info, we can help you determine the amount of taxes you might expect to owe for 2015.

By then comparing this against your projected withholding, you can adjust the withholding on your paycheck in advance as needed, and ensure a happy visit to our office in the winter.

This can also be a good time to organize your financial records (about which I recently wrote) and/or get started with some financial software. Getting organized now can make gathering a report of all those deductions a breeze, come tax time.

Because of recent tax changes, wealthy Americans in particular are facing higher tax rates on ordinary and investment income.

That makes it all the more important to review Uncle Sam’s highest-impact tax breaks, such as donations of appreciated assets, tax-free exchanges and capital-loss harvesting.

Unlike obvious moves, such as contributing to an individual retirement account or a 401(k) plan, these strategies require a higher degree of awareness and active planning.

Not all high-impact breaks are for the wealthy. Any homeowner can benefit from a provision allowing taxpayers to pocket tax-free income from renting a residence for as long as two weeks, and low-bracket taxpayers can pay zero tax on long-term capital gains.

Other important moves can help minimize estate, gift and inheritance taxes. Really, there are a variety of tax adjustments we can make to help you with your planning for the year … but you have to let us help you. It is, after all, why we are here.

Warmly (and until next week),

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis on NOT Automating Your Personal Finances

James Pantzis on NOT Automating Your Personal Finances

As we just celebrated our Independence Day, I think it’s worth considering *financial* independence.

But we should pause first in gratitude to Will Smith and Jeff Goldblum who, along with our armed forces, back in 1996 successfully repelled an alien invasion that was bent on wiping our very existence off of this earth.

Or perhaps, in the real world, we should honor the 56 signatories to the incredible document that is the Declaration of Independence, and remember that we live in a system of government driven by principles, laws and a shared covenant — rather than one driven merely by ethnicity or pure government power. We are, truly, blessed — no matter what you may think about the state of our current politics.

Now … I’ve written before about the value of automating your financial world. Making savings and investment an automatic, “don’t even have to think about it” decision can help kickstart some great habits for all of us.

However, there are some dangers.

High frequency trading in the financial markets (and the occasional crashes resulting from it the last few years) is just one example of the dangers of this approach.

And there are some instances when “automation”, as such, can actually HINDER our financial growth. And they may rob you of the kind of independence you’re looking for.

Call it the hidden cost of convenience. And, in my opinion, it’s quite real.

So, whatever the numbers in your bank accounts are showing, I believe that there is application to you for what I write about this week. Whether there are four figures or ten in your accounts, the principle can hold true.

Check out my humble suggestion, and let me know what you think…

James Pantzis on NOT Automating Your Personal Finances
“You always pass failure on the way to success.” – Mickey Rooney

Small business owners and those with more complicated incomes know what it is to write checks for quarterly taxes, and, I believe, they have a deeper sense for what they are paying, as a result.

In fact, I think our country would be a different place if everyone had to write a personal check and send in their taxes like this. When people really see what they pay (or don’t pay) I think they would feel differently about their tax burden!

This is a common refrain among certain political observers — but it has me thinking about what it might mean for YOUR family’s personal finances …

In fact, this is part of the genius of financial guru Dave Ramsey’s “envelope system” for family budgeting (whereby you place cash into specified envelopes, and pay only as much cash as remains in the envelope for different budget categories). “Automating away” our obligations can lull us into financial slumber.

Which is why I now propose that you REMOVE automation from certain checks that you write each month from your personal finances. (Again, this is aside from automated savings, as I’ve previously discussed.)

[But a word of caution: The only danger to this approach is that you run the risk of focusing too much on scrimping pennies. I certainly advocate wise budgeting, but it’s important to remember that thinking overmuch about saving money can constrict your mind away from important “risks”, which can often be worth taking — like starting that business, making a new investment, etc. Don’t let this technique keep you from expanding your financial mindset!]

So, a few suggestions for what you might DE-automate:
1) Just once, receive your paycheck in cash (instead of ACH’d), or cash the full amount when you receive it. Because, have you ever HELD one paycheck’s worth of money before? It’s really hard to fully comprehend how much you’re bringing in until you physically feel those stacks of $20s in your hand. I can guarantee you it’s a lot harder to spend it when you’re seeing it in person rather than online. And it hurts frittering it away more, too.

2) Paying your mortgage manually. Feel the burn of this large check, every time you write it. It will trickle into how you think about the other bills which you pay such that even if this is the only bill you take off of “auto-pay”, you’ll be wiser with your remaining funds each month.

3) Only purchase vehicles for cash. If you had to pay outright, wouldn’t you end up with a cheaper car? Probably. Just because many are used to setting up loans and payments for vehicles, does NOT mean it’s wise — in fact, this is one of the primary markers for the “quiet millionaires” (those who are getting ahead financially, even on relatively smaller salaries). Yes, your pride might suffer when you’re not rolling around in a 2015 Lexus … but considering the real cost of that pride-booster does wonders for ameliorating your egotistic tendencies.

In short, paying in cash (or with a manual check) helps you to consider the following questions:

* Is this ____ still WORTH it?
* Is there a way I can cut it down a bit?
* What’s the best way to pay for it right now? (c/c, check, cash?)

Again, some of this could literally take seconds, but the point of it all is that you STOP to do it. With automation, you don’t get the “ping” every month because it’s already doing the thinking for you. You’ll learn a LOT more about the financial “you” this way than you would otherwise, I’m certain. It’s really about paying closer attention.

With warmth (and until next week),

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis’ 5 Quick Tips for Teaching Kids About Money

James Pantzis’ 5 Quick Tips for Teaching Kids About Money

We’ve seen many parents in our offices these last few months, and we obviously go over tax returns, customized plans for saving more on taxes, as well as a variety of other strategies for handling their assets so that their children will, one day, be financially prepared.

(We certainly wouldn’t want our children and their eventual families to end in a financial crisis like we’re seeing unfold in an entire nation, such as Greece!)

But as we prepare our own house, and make sure everything is order, I’ve sometimes noticed that we don’t give enough thought to helping our children build the kind of financial “house” that they will eventually need so they can withstand the future gyrations of economic life.

You see, I’ve asked a few parents how they handle finances with their young children. Well, I’ve found that some parents have no plan for training their younger children how to understand, and handle finances. (Notice that word: “training”.)

I’d like to help you fix that. We’ve put together some strategic advice to help you raise financially-literate children, in hopes that by the time they reach adulthood, they’ll be contributing to your family economy — rather than draining it!

Let me know what you think …

James Pantzis’ 5 Quick Tips for Teaching Kids About Money
“Today well lived makes every yesterday a dream of happiness and every tomorrow a vision of hope. Look well therefore to this day.” – Francis Gray

Perhaps I’m biased, but I believe that it really is never too early to start teaching your kids about money. Obviously, by doing so, you are preparing them for the uncertain future. You’re also establishing a family culture, wherein money is handled with maturity and openness.

But the best news is that helping them to develop these habits can be fairly simple! I’ve put together some basic steps — many of these may not seem like rocket science, but my job is to be a coach and a goad for you to do the things which you already may “know” to do.

1) Give them an allowance — with strings.

Don’t just give them an allowance for doing nothing — this actually defeats the purpose. You can buy your young children whatever they ask for, so they don’t need “spending money”. Instead, see an allowance as a training tool: your children should learn that money is earned by working. Believe it or not, this isn’t an obvious connection for a young child! Because a kindergartner truly is able to help with small chores around the house, you can put them to work and let them earn their allowance this way. Rather than seeing it as a “bribe”, or some sort of indentured servitude, this is a critical knowledge base for a young child.

2) The old lemonade stand.

Encourage this! And do it with adult supervision. Your child will learn how to make a product, market it and sell it. While the idea is to teach good money habits, they are also learning valuable life lessons — nothing sells itself, after all. (Though with cute kids, that’s sometimes the case!)

3) Saving and investing.

Rather than showering your young child with gift after gift, encourage them to go through the process of working towards a savings goal. You can always “supplement” this process, but having your child save up for an item will teach them that nothing comes for free. In return, children also learn that the items you buy them have real value and should be treated as such.

This might, even, cut down on those “negotiations” so familiar to parents who bring their children into stores.

4) Cold, hard cash.

A lot of children nowadays are so used to seeing parents pay with debit and credit cards that they may not know what actual money looks like! This is a new-generational issue, and it’s important that your children learn that money is more than a mouse click, or a card swipe. Show your kids the different types of money – coins, bills, etc. and tell them the monetary amount for each.

When you go shopping, let your child have a try at paying for certain items. This will help them feel quite grown up, and again — they see that transactions don’t just “happen”, they cost.

5) There’s an app for that.

I just found a great article in US News & World Report that shared 7 great iPod or smartphone apps that also provide a bunch of great lessons. Some families don’t allow their younger children access to these devices, but if you have older children in the house, you could even try some of these apps as a condition for handling the responsibility of using one of these devices. Here’s the article, and they have seven great options that they’ve vetted, ranging from free to paid (but inexpensive): http://bit.ly/1LEjrru

What about you? How have you gone about teaching your kids about money? I’d be interested to hear some other tactics, and may share them with the list next week.

But until then, I remain your kindly tax pro — out to save the world from improper planning, unnecessary taxes … and from young adults still living on Mommy/Daddy credit!

Warmly,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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Pantzis’ Simple, 4-Step Plan For Organizing Your Financial Records

Pantzis’ Simple, 4-Step Plan For Organizing Your Financial Records

The events in Charleston last week have left all of us — once again — searching for answers to what feels like a festering wound simmering under the surface of our culture.

But the grace notes we have seen coming from the hearts and mouths of survivors and family members of the victims might, perhaps, show all of us a way towards healing. Forgiveness, rather than offense (even when offense is completely justified), is truly a much stronger force.

In the meantime, let’s take notes on what those brave family members are doing.

Now … well, we’re almost to the end of June, which feels a little crazy to me. But here we are.

These months provide a different rhythm (especially for those who have young children in the home!), and in my opinion, it’s a great time to get organized in a way that you perhaps haven’t been in the past.

It’s amazing to me how many families and households don’t have a workable plan when it comes to handling the flow of paperwork that comes through their mailbox, and for tracking their online world.

In fact, the cloud-based nature of so many financial statements can lead us all into a bit of a lull: “Everything is online, so I can just throw away the paper statements”, or “If I really need something, I can always request a copy.”

And so people have begun letting their household filing system go to the dogs.

The problem with that is …

1) It’s actually not the case that everything can be available online — many statements are only kept a short amount of time “in the cloud”, and unless you are scanning them yourself, you often have to pay fees to retrieve older items.

and

2) Throwing away documents and trusting everything to “the cloud” can leave you vulnerable to ID theft (especially when you don’t employ a shredder!).

So, I’ve put together something that will (hopefully) provide you a simple plan, and perhaps a tiny little kick in the behind to get this into place.

Pantzis’ Simple, 4-Step Plan For Organizing Your Financial Records
“You will never win if you never begin.” – Robert Schuller

When we’re privileged enough to have conversations with clients unrelated to estate planning, and more about their general financial world, we’re often asked about setting up a good system for keeping it all organized. Often, one of the major problems for many families is simply keeping track of everything! So here’s what we suggest…

1. Find a good home for your documents.
The best spot to set up a home financial center is where you find the bills and receipts generally piling up–even if it’s in the corner of your kitchen. If you don’t want your financial records on your kitchen countertop, store them away in a corner filing cabinet nearby. Better to use a space you usually go to than to try to form a habit of going to the upstairs study you visit only once a week.

2. Determine what you need to keep and what you can throw away.
Generally, you can get rid of grocery receipts, credit card slips for non-tax-deductible items, and ATM receipts you’ve already reconciled. Toss all your junk mail. You should hold on to receipts for anything that’s tax deductible, as well as medical expenses, past tax returns, and records of charitable contributions. Also keep insurance policies, investment purchase records, mortgage and property bills, and warranties and instructions.

3. Sort your papers.
Use four categories: bills, insurance policies and records, bank and brokerage statements, and other important documents. Then sort those papers into separate folders for each account, type of receipt (like transportation expenses or medical bills), insurance policies, etc. Toss the papers that don’t fit into any category.

4. Spend five to 10 minutes a day maintaining your files (or 30 minutes per week).
Open your mail near the trash bin. Circle the due date for your bills and file them in the proper order. Then save whatever you decide to keep in its proper folder.

I hope this helps.

Until next week then, I am warmly yours,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis On What to Look For in an Executor of Estate

James Pantzis On What to Look For in an Executor of Estate

We work hard for our clients.

Crafting elegant, tax-saving and easy-to-understand strategies to help you save on your taxes is a joy. And, of course, removing from our clients the annoying hassle of dealing closely with government paperwork, deadlines and personnel — while not exactly a “joy”, does also provide us with great satisfaction because we know that we get to serve our clients and help them not have to deal with stuff that isn’t exactly “fun”.

But sometimes (usually a rare instance), there are circumstances in which, despite great planning and implementation of strategy, things go sideways.

Last week, I wrote about estate planning, and I do want to touch on it one more time here today — despite the fact that it isn’t our primary area of service. It’s such a critical part of a family’s financial picture, but it doesn’t really get focused on sometimes until it’s too late.

You see, even the most well-crafted estate plan can be ruined by a poor choice of executor.

Of course, that said, we can always do our best to help our Brooklyn clients and their families deal with it and navigate through this poor choice, once it becomes apparent — but it’s always better if the choice is made well.

So, this week, I have some words about this, as you consider your current executor of estate, and whether they fit the profile…

James Pantzis On What to Look For in an Executor of Estate
“You only have to do a very few things right in your life so long as you don’t do too many things wrong.” – Warren Buffett

Your executor of estate is what is called a “fiduciary” which means he or she must be someone who will act in good faith when handling your affairs. He or she cannot take advantage of his or her position or unfairly profit from financial transactions from your estate. The executor will meet the standard of a fiduciary duty if he or she does a competent, honest job.

You want your fiduciary to be both trustworthy and capable of handling the tasks. You have to have complete faith in him or her. Make sure he or she understands the responsibility of the job and is willing to accept it. This requires a discussion before you make your Will.

It sounds a bit strange, but name someone who is healthy and likely to be around after your death. To be secure, you should definitely select at least one successor executor to serve if your first choice is unable or unwilling to do so when the time comes.

For many people, the choice is obvious — their spouse. Others select a close friend, a grown child or other close relative. If no obvious person comes to mind, make a list of your possible selections and use common sense (and this article as your guide) to make the wisest choice.

Remember, as I wrote last week …

An executor must:

* Obtain certified copies of your death certificate
* Locate Will beneficiaries
* Examine and inventory your safe deposit boxes
* Collect your mail
* Cancel credit cards and subscriptions
* Notify the SSA and other benefit plan administrators of your death
* Learn about your property, which may involve examining bank statements, deeds, insurance policies, tax returns and other records
* Get bank accounts covered by the Will released
* Place notices in newspapers so creditors can make claims
* Hire a probate attorney

Either the executor or the probate attorney must:

* File court papers to start the probate process and obtain legal authority to act as your executor
* Manage your assets during the probate process, which usually takes six months to a year
* Handle court-supervised probate matters, including transfer of property to your beneficiaries and making sure your final debts and taxes are paid
* Have final income tax forms prepared, and, if necessary, have estate tax returns for your estate prepared and filed

So the choice is important.

But lastly, as you make these decisions, consider telling your family exactly what you plan.

This gives you the chance to head off any possible disagreements among your family about how things “should” be handled. If you happen to die or lose capacity, it’s usually too late.

Eliminate surprises and keep those family fights at bay.

Perhaps the LAST thing to say is: make sure you have competent help by your side, in ALL things financial (especially when it comes to your existing finances and tax strategy).

And that, of course, is what we’re here for.

Until next week then, I am warmly yours,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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James Pantzis Offers Practical Tips For Your Estate Plan

James Pantzis Offers Practical Tips For Your Estate Plan

First off (and this doesn’t necessarily affect all of our clients), just a quick reminder thatthe second quarter estimated taxes are due on June 15th. This is the quarter that always sneaks up on everyone, as it’s only two months after April 15th — so don’t get behind!

Secondly, the summer is a perfect time to assess your financial picture from a holistic perspective. And by that, I mean: let’s look at your big-picture goals and your strategies, and create a workable plan, shall we?

In subsequent weeks, I’ll give you some “back of the napkin” strategies for a tax planning strategy, but I want to remind you of another component to a well-established financial plan today — one that doesn’t usually get handled well (as you will see).

Because the numbers haven’t changed much since last I saw them:

Over 50% of adults do NOT have a will or other estate planning instruments in place to protect themselves and their family. And, perhaps even worse, over 69% of parents have not yet named legal guardians who can raise their children if something happens to them. (And by “in place”, I mean something that would be legally recognized — not an “idea” that hasn’t been properly notated).

Those are scary numbers. Estate plans obviously provide great peace-of-mind for a family … and, of course, they can create a bunch of headaches if not handled correctly.

Believe me, I’ve seen a few doozies in my day.

Which is why it always helps to have someone in your corner. Whether or not we speak into your situation directly, we can also bring in specialized counsel. We aim to be your family’s advisors in all things financial, whether we have “skin in the game”(i.e. we get paid for it) or not. Our clients are our family, and we want to see you treated well by those who serve you.

So … all that said, consider this:

James Pantzis Offers Practical Tips For Your Estate Plan
“The noblest search is the search for excellence.” – Lyndon Johnson

You may have established an estate plan in the past, or you may not have gotten around to it, but it is critical that you ALWAYS have an up-to-date plan.

Most people are smart enough to keep their cars in good working order–it requires tune-ups, an annual physical check-up, etc. But I’m always surprised by the common misconception about how often they should have their estate plan reviewed.

You see, most people see estate planning as something you “do once” and never have to think about again. That’s just flat incorrect.

Just like your health can take a dramatic turn (for the better or worse) in a year, your estate planning decisions can change dramatically in a short period. Sometimes, something as simple happens as the people you’ve identified to serve as the guardians for your minor children moving out of state. That’s just one of many good reasons to revisit your estate planning decisions.

Plus, though there’s been a lot of talk in recent years about the higher estate tax threshold, there are many ways in which out-of-date plans can be “burned”, by not complying with new laws.

Your estate plan is a “living and breathing” plan (at least when done right) and therefore has to be maintained to reflect your life as it is today.

Second, PLEASE ensure you have chosen the proper executor.

Whether you’re dealing with significant sums, or with a more modest estate, choosing the person to handle these transaction is a critical decision for EVERY family.

It’s always a great idea to get professional advice in making these selections. But, if you choose to “go it alone” for some reason, here’s what you need to keep in mind as you consider who will be your executor:

An executor must:

* Obtain certified copies of your death certificate
* Locate Will beneficiaries
* Examine and inventory your safe deposit boxes
* Collect your mail
* Cancel credit cards and subscriptions
* Notify the SSA and other benefit plan administrators of your death
* Learn about your property, which may involve examining bank statements, deeds, insurance policies, tax returns and other records
* Get bank accounts covered by the Will released
* Place notices in newspapers so creditors can make claims
* Hire a probate attorney

Either the executor or the probate attorney must:

* File court papers to start the probate process and obtain legal authority to act as your executor
* Manage your assets during the probate process, which usually takes six months to a year
* Handle court-supervised probate matters, including transfer of property to your beneficiaries and making sure your final debts and taxes are paid
* Have final income tax forms prepared, and, if necessary, have estate tax returns for your estate prepared and filed

Of course, the open probate process is something you will absolutely want to minimize and even avoid. A sound plan does this.

But this right here (the choice of executor), is where it starts. In the future, I’ll have more to say on the subject of an executor and why that choice is so important.

I am, warmly, yours,

James Pantzis
(718) 858-9864
James Pantzis, CPA, PC

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James Pantzis Discusses 11 Traits of the Financially Secure

James Pantzis Discusses 11 Traits of the Financially Secure

Part of my early-Monday news scan this week brought me this story: http://cbsn.ws/1Q0chAV. One of the “highlights”: almost half of all US households could not come up with $400 to cover an emergency expense. They would need to sell something or borrow cash to do so.

If you find yourself belonging to that category, I’m going to help you today, I think. And if you don’t, I urge you to continue to live your financial life in such a way that you remain there. I have some ideas (11 of them, in fact) for you.

In my experience, if you want to get out of a hole, you study the behavior of those who have already made it out. And you do everything you can to copy that behavior.

Yes, some people have been fortunate enough to inherit wealth, etc. But many, MANY more of those who have wealth came about it in a different way.

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Before I get there, a big tax reminder: 2nd quarter estimated taxes are due on June 15th. Make sure to mail your Federal estimate with voucher #2 (1040-ES) and your check payable to the United States Treasury. Include your social security number and the words “2015 Form 1040-ES” on your check. Mail by June 15, 2015.

If you have state estimated taxes due, the procedure is very similar, except you are perhaps-obviously not paying the “US Treasury”, but rather the Department of Revenue for your state of income.
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Now, so that YOU do not find yourself in the unfortunate place of not being able to scrape up $400 in an emergency … read this now,

James Pantzis Discusses 11 Traits of the Financially Secure
“You cannot control what happens to you, but you can control your attitude toward what happens to you, and in that, you will be mastering change rather than allowing it to master you.” – Brian Tracy

Becoming a household that will be able to ride through instability and uncertainty is only going to become MORE important in future years, not less.

So, that being the case, here is a portrait of those who are able to achieve this status.

You’ll notice that these are just as significantly about your mindset as you relate to your finances, as about your behaviors.

Here’s what the Financially Secure look like …

1) He always spends less than he earns. In fact, his mantra is that over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2) She knows that patience is truth. The odds are you won’t become a millionaire overnight. If you’re like her, your security will be accumulated gradually by diligently saving your money over multiple decades.

3) He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

4) She realized early on that money does not buy happiness. If you’re looking for financial joy, you need to focus on attaining financial freedom.

5) He understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.

6) She’s a big believer in paying yourself first. It’s an essential tenet of personal finance and a great way to build your savings and instill financial discipline.

7) She also knows that the few millionaires that reached that milestone without a plan got there only because of dumb luck. It’s not enough to simply “declare” to the universe that you want to be financially free. This is not a “Secret”.

8) When it came time to set his savings goals, he wasn’t afraid to think big. Financial success demands that you have a vision that is significantly larger than you can currently deliver upon.

9) He realizes that stuff happens, and that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner, and can be triggered from multiple sources: the death of the family’s key breadwinner, divorce, or disability that leads to a loss of work.

10) She understands that time is an ally of the young. She was fortunate (and smart) enough to begin saving in her twenties, so she could take maximum advantage of the power of compounding interest on her nest egg.

11) He’s not impressed that you drive an over-priced luxury car and live in a McMansion that’s two sizes too big for your family of four. Little about external “signals” of wealth actually matter to him.

And a little bonus, if you will: She doesn’t pay taxes which could have been avoided with a simple phone call to her tax professional. She plans ahead, before tax time.

Give us a call today: (718) 858-9864

I am, warmly, yours,

James Pantzis
(718) 858-9864
James Pantzis, CPA, PC

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Before You Say “I Do”: James Pantzis’ Marriage and Money Checklist

Before You Say “I Do”: James Pantzis’ Marriage and Money Checklist

Memorial Day weekend often feels a little … jarring, at times.

Burgers, pools, picnics — set against the solemn backdrop of remembrance for the sacrifice of so many thousands who have laid down their lives so we can have those freedoms.

However, when you talk to veterans (as I get the chance to do in the course of our tax preparation work), they do often tell you that these very freedoms (the ones much bigger than backyard barbecues, of course) are exactly why those sacrifices are worthwhile.

So in a sense, parades and picnics are exactly the right sort of thing to honor those men and women who made the ultimate sacrifice.

But let’s do remember that Memorial Day is much more than simply the “start of summer”.

Moving forward … it’s probably accurate to say that with the official start of summer, we are moving into the wedding season.

So I thought I’d give some short advice for the happy couple, whether before they are married or for those with a few years under their belt.

Before You Say “I Do”: James Pantzis’ Marriage and Money Checklist
“The only way around is through.” – Robert Frost

Many young couples start out married life without a clear idea of how to handle their finances — leading to stress, arguments, and long-term marital problems.

And correspondingly, there are some couples for whom finances have become a painful wedge. So, though I don’t fashion myself to be a “marriage expert”, I have seen many financial partnerships work well … and more than I’d like, of those that didn’t.

Here are some ideas for you, a marriage and money checklist of sorts.

1. Confront issues directly.
Whether you are in a pre-marriage stage, or are already working through your partnership, it’s crucially important to learn the skill of conversation about finances. There can be so much mental anguish over shame, fear and past pain that unhealthy communication patterns begin to emerge.

So give yourselves the gift of honesty, and make a list of hard topics that you can tackle over time.

As an example, many couples are afraid to talk about the three D’s: debt, death, and disability. Take time to discuss these fears instead of avoiding them. Planning will help you both feel better.

2. Explore your attitudes.
How we were raised has an enormous effect on how we deal with money. Depending on what your home was like as a child, you likely heard many different attitudes expressed around the dinner table, and they have undoubtedly shaped your understanding as an adult. Whether from poverty, or from abundance, your background is extremely powerful.

So, if you and your spouse’s money attitudes differ, talk about how you were raised and work towards a compromise where you can strengthen each other’s weaknesses.

3. As an exercise, trade financial tasks.
If one of you usually pays all the bills, switch for a couple of months. You or your partner may get a crash course on how much running the household actually costs. Keep track of all spending for at least one billing cycle (usually one month) to actually see where your money is going, and decide which expenditures can be decreased or eliminated. You might even find opportunities to give.

4. Keep some (small) finances separate.
A joint checking account is useful, but maintain some kind of separate amount of money as a “slush fund” or sorts, whereby you can each make purchases without mutual consent. Keep these amounts small (you always want partnership in the big amounts), but a sense of independence (however symbolic) will help both of you feel you have equal footing in the relationship, even if you have a big difference in salaries.

5. Collaborate on some kind of financial planning.
Find a way to work together on a small, money-related project, whether playing the stock market or saving towards some small goal. Pick something that doesn’t carry emotional weight, and see it as an exercise. You’ll find that working together in a small way will help you in a BIG way, as your decisions become more significant.

6. Agree together that you won’t pay excess taxes.
Obviously, this is what we are here for, and perhaps one of the best gifts you can give yourselves is a workable plan as it relates to a tax strategy.

I am, warmly, yours,

James Pantzis
(718) 858-9864

James Pantzis, CPA, PC

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