Newsletter

2010 Taxes

A Sneak Peek at 2010 Tax Rates

While the only thing certain about Federal Income Taxes in 2010 is that the Government is going to change many of the rules, it is still helpful to take an early look at the new 2010 Tax Rates.

Invest in 'Their' Future

Tips to Teach Your Kids About Money

As we continue to recover from the recession, Americans of all ages are learning more about the importance of sound money management. Why not consider setting a 2010 goal to empower your children to learn more about financial responsibility? Here are some tips to help teach your kids about money:

Start Them Young: Children can understand basic concepts regarding money even before they learn to count. Introduce them to money by showing them the different denominations and have them help you count out change.

Discuss Your Money Values: As children grow older, discuss your financial situation. Where does your money come from? How do you spend your money? How much do you save? How do you use credit cards? Tell them about the importance of saving before spending and discuss the differences between wants and needs. This practice will help transfer your financial values to your children.

Consider an Allowance: Giving kids an allowance can be an effective teaching tool. For example, give $3 as 3 $1 bills and encourage your child to put one dollar in a savings account, set aside one dollar for spending, and place one dollar in a giving jar to promote charitable donations.

Set Goals: When your kids want something, have them set a goal and help save money to purchase the desired item. Setting and working toward financial goals helps children develop responsible spending habits and promotes self-confidence.

Explain the Concept of Interest: Consider giving kids interest for the money they save at home and charging them interest on money they borrow from you.

Keep Records: Look for ways to have your children keep track of their money. Make a simple thermometer picture that gets filled up as they save for a large purchase. Work with your older children to develop a simple system to keep track of their spending. It can be as simple as keeping 12 envelopes, one for each month, and encouraging your child to keep notes and receipts for each month.

Financial Basics: For teenagers, do not assume their school will teach them good financial skills. Make sure your child can balance a checkbook, read a credit card statement, make change, calculate their net worth and understand other basic financial concepts.

2010 Mileage Rates

Reduce Tax-Time Stress!

Start Collecting Your Tax Records Now

Towards the end of this month you will start receiving the paperwork necessary to file your income taxes. What should you keep? Here is a checklist of some common items needed at tax time:

Income

W-2s

1099s for miscellaneous income

Proof of alimony

Interest and dividend income statements

Social Security (1099-SSA) and pension income statements

Retirement plan distributions (1099-R) for contributions, distributions, and rollovers

Brokerage statements (1099-B)

Profit/loss K-1 statements from partnerships, trusts, and small business

Proof of other income (jury duty, child support, etc.)

Income/expense from rental properties, self-employment, and hobbies

Deductions

Real estate tax documents

Expenses: moving, education, child-care, mortgage and student interest, IRA contributions

Charitable donations (cash and non-cash) receipts

Health care expenses

Casualty and theft loss documentation

Un-reimbursed employee expenses

Receipts for qualified energy efficiency purchases

Documents for the purchase, sale, or refinance of your home

Motor vehicle registration receipts

Gambling profit and losses documentation

Mileage logs for business, moving, medical, and charitable travel

Job related expenses

Other

Cost information for any investment or property sale

Full information on any dependents (DOB, age, any income, etc.)

Education information for all qualifying family members

Review all checking account and credit card statements for deductions

Identify any estimated tax payments made during the year

Copies of any tax refunds

Year-end payroll check stub

Recap of any gifts received or given in excess of $13,000

New Year, New Plan

Start the New Year With a Plan to Become More Financially Secure

Along with your 2010 resolutions to exercise more and eat less, why not resolve to have a more financially secure year for yourself and your family? A recent study found that families with a financial plan in place felt more secure, more optimistic about their future, and more confident in their ability to save for retirement.

Create a financial plan for your family by following these steps:

Set Goals. What do you need to feel financially secure or fulfilled? Financial goals may include buying a home, saving for an emergency fund, paying off credit card debt, saving for retirement, or saving for your children's college tuition.

Prioritize. Prioritize your goals to ensure that top priorities are provided for before pursuing less important goals. For example, paying off credit card debt may mean waiting to purchase a house. Try to focus on goals that make you feel most secure, benefit most members of your family, or will cause the most harm if they are deferred.

Budget. Finally, look carefully at how your family spends money. Are you working toward your goals or moving further away from them? A good rule is to aim to spend less than 90% of your household income, with the remaining 10% dedicated to achieving your financial goals. By examining your spending habits closely, you should be able to find ways to cut back. Pay attention to larger purchases and expenses. Is a bigger house worth delaying your retirement? If you can, reduce or delay large purchases and focus instead on achieving your goals.

As a final thought, don't hesitatate to ask for help developing your plan. For most of us, knowing that you have a plan and are sticking to it will make you happier in the long-run.