General
 Make charitable donations. Don’t forget, these also include non-cash donations.

 Use up your flexible spending plan funds. Use it now or lose it.

 If you have a Health Saving Account (HSA), contribute the maximum. For families it is $6150, for individuals $3050.

 If you need more itemized deductions, pay your January mortgage payment in December. The same for property taxes. If not, pay it in January.

 Enjoy the holidays! But don’t forget about your taxes.

Residential Energy Credits (Credits reduce your tax liability.)
Non-business Energy credit. The credit is 30% of actual costs, with a max of $500. Do this before the end of the year for 2011.
Examples include:
- Energy efficient heating and air conditioning system (most are,
- Insulation
- Exterior windows and doors
- Metal roofing
- Qualified natural gas, propane or oil furnace or hot water boiler

Residential energy efficient property credit. The credit is 30% of actual costs. Do this before the end of the year for 2011 credit. The program runs through 2016.
Examples include:
- Qualified solar electric
- Water heating
- Small wind energy
- Geothermal heat pump property costs
- Fuel cell property costs.

Vehicle Energy Credits
Plug-in Electric drive vehicle credit. . Minimum credit is $2500 up to $7500 depending on battery capacity for vehicles purchased after 12/31/2009. Program runs through 2014.
Plug-in Electric vehicle credit. The credit is 10% of the vehicle cost with a maximum of $2500. The program ends December 31, 2011 so purchase the vehicle before then.
Conversion kits. The credit is10% of kit cost with a maximum of $4000. The program runs through 2012.

Individual Retirement Accounts (IRAs)
401K retirement plans. Contribute the maximum amount possible. To get the deduction on your 2011 taxes, you must contribute to your 401K via your paycheck on or before December 31, 2011. The maximum is $16,500 for 2011.
IRA to Roth IRA conversion. In certain situations it may be to your advantage to convert your IRA to a Roth IRA before December 31st. Contact me to for more information about the tax implications of converting it before or after 12/31/2011.
IRA Qualified Charitable Distributions. If you are 70 1/2 and would like to make a charitable contribution, you can make it directly from your IRA. When you do this the withdrawal will not be taxable and will count towards your required minimum distributions. The maximum annual exclusion is $100,000. This ends 12/31/11.

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Next health insurance premiums are high.  I keep asking people how much they pay and I can’t believe what I’m hearing.  My husband, my daughter and I have an HSA and we pay around $500 per month with a 4500 deductible.  This is one of the lowest I’ve heard.  A client of mine was laid off recently and is now paying COBRA premiums.  These must be the highest.  They pay $600 per month for her and her husband.  Unfortunately they both have health isssues that I think could be prevented if they just take care of their health.  This the main reason Republicans are against this act.  Insurance premiums are too high!

Since I am corporation now, I pay attention to how it affects me directly.  Corporations must offer affordable health insurance. And if they don’t they will have to pay a penalty. However, if an employee does not want insurance they have to sign an affidavit saying they have been offered it an turned it down.  And who do you think would do that if  they already know that IRS will penalize us on our own personal tax return if we don’t.  Ugh!  Affordable is the key here.  We all know its expensive so I can see taking a loss on that. A very expensive one.

Here’s something you want to know:  There are tax advantages with health care premiums. If you’re an employee:  Look to see if your employer offers a cafeteria plan. Taking as pre tax dollars allows you take it dollar for dollar without the 7.5% limit on the itemized deductions form.  And if your lucky enough to have an employer who pays premiums sign up as quickly as you can.  If you happen to be laid off and your health is not good, look for an employer who pays your insurance at least partly.

As an employer, look into an HSA for your employees.  The premiums will be lower and it can be a great tax advantage to the employee.  My husband have one through his corporation.  We not only get the premiums as a deduction but we also take the deposits as a deduction on our personal tax return.  We took $5000 the  last two years for out of pocket expenses.

As far as the health insurance credit goes, the HSA premiums do not qualify for the health insurance tax credit.

But most importantly, take care of your health!  And if you serious about it read my previous article “ How to motivate yourself to exercise!!

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This will not help the employer.  You still have to pay in 6.2%.

It can affect the existing people that are now receiving social security.  If you don’t know, the Social Security Fund is in a projected deficit of $41 billion this year (excluding interest income) attributable to the recession . So whether you  realize it or not, this money will not be there for anyone age 50 or younger.  When President Bush addressed this while in office, he specifically said those that are currently receiving social security will not be affected. Now that Obama has made this change, I dread what might really happen.  Peoples social security checks will be cut. And of course most of us will not receive anything from the money we are putting in now.

OK so I hear this change is supposed to encourage people to spend more.  Bull!  That’s why we’re in the place we are in now:  Overspending.  I don’t about you but when I’m running low on cash, I slow down my spending.  If I’m in the negative (deficit) I use cash only. I really think that the financial decisions the government makes now are based on money they don’t have.  The negative balance in the check register just keeps getting bigger!

Read my next controversial issue:  Health Insurance Premiums and the Health Care Reform Act

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Background:  On April 26 2009, I was just so embarrased by my weight gain I had to do something.  I had lost weight before but I put it on again.  See I’m an emotional eater.  I was going thru a rough year processing stuff in therapy.  This triggered emtoions I had never felt before.  I had gone up another size and starting shopping at the big girl store.This was the last straw:  June of this year, we were having a pool party at my daughters place.  Both of my girls made derogertory comments about my weight gain.  That really hurt.  I realized how important it is to set a good example for my children. I wasn’t willing to give that up.

1)Create self-boundaries–ie: I just couldn’t go back to my original weight 5 years ago.

2)Get clear on what’s important to you. The relationships with mychildren.

Pain is a great motivator, but you don’t have to weight:) that long.  I was trying.  I started walking 15 minutes in 2009.  But I kept eating like there was no tomorrow.

You know, you don’t have be into the idea 100%, 70% is much better. It gets  you started.  Once you get going:

1)Start setting goals.  Find one you can accomplish early on.  That keeps  you motivated.

2)Just don’t stop whether you want to or not.  Act as if you’re really into it and eventually you will be.

3)Try to figure out what motivates you. I’m accountant, so I like to record things.  I kept track of when I ran and the details to that.  That kept me going for a long time.  It still does.

4)Tell everyone you know and trust about your endeavor. They will notice and ask how its going.  I realized that people pay attention. That keeps me going.

My favorite:

5)Remember, whenever your mind is playing games with you and you do it anyway, it gives you a great boost to your self-esteem and confidence!

That effects everything you do in a positive way!

Did this article help you?  Struggling? Let me know and we can talk about it.

Evelyn Edwards,CPA

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Did you know that most people use the emergency room as a way to get medical help that could normally be done in a doctor’s office at a cheaper cost?
However, most doctors expect payment upon services rendered, where most emergency rooms allow you to set up a payment plan and most of those plans are never paid out.

Did you know that most people that visit the emergency room do not have health insurance?
I think it’s important as individuals we do not become part of the healthcare crisis by incurring unsecured debt especially related to medical. So for the reasons above, we must become responsible by having health insurance.
I’ve briefly stated below what the changes are for current year 2010. Most insurance companies are increasing their rates because of these federal requirements listed below. If this is the case with you, I suggest you shop around and make sure your company is adhering to these principles. I think it’s important that we “police” these policies ourselves.

I don’t see or know of any way that the federal government can enforce these policies.
If you know of any way they can, please share your knowledge and expertise with the rest of us.

From my personal experience, my husband and I are both corporations. On my husband’s business we have set us a health savings account (HSA).It is a high deductible health insurance policy. It has been $467 for him and me and my daughter (age 21) and is now going to $523.This has been the best thing we could have done from a tax planning point of view. As an individual you can contribute up to $5000 and take it as an adjustment to total income.  I have a lot of out of pocket expenses related to my dental and anticipate more.  So this is something I will not change.
Please share with us your policy and the price you pay. I think it would be interesting to see what others are paying. Most times, it helps to shop around.
In my profession, I look at politics as a way to either reduce or raise taxes. The new health care reform bill as a whole is going to be incredibly expensive but is expected to reduce the federal deficit by $143 billion over ten years, this is a rough estimate by the Congressional Budget Office. The bill is hoping to expand health care coverage to 32 million Americans who are not insured.
Some Provisions:
2010—what’s happening now: On the individual level
New plans written in 2010 must offer preventative care with no co-pays or deductibles.
Adults and children previously denied coverage due to pre-existing conditions will be able to access healthcare- I’m sure it will be much higher for these people.
Lifetime limits are a thing of the past. I’m sure this is another reason insurance companies will increase their rates.
Children up to 26 can stay on their parents plan.

Retirees aged 55-64 are offered access to a re-insurance program.
On the business level:
Self-Employed persons would be able to purchase insurance through the state in which they practice in. Within one year from the enactment of the bill funding would be available to states to exchange amongst citizens. Governor Perry has declined this because it would be expensive to run.
Small business offering insurance to their lower income employees can get a 35% tax credit from premiums paid.
There is so much more to know about health care reform, I’ve decided to publish a part II after we really get into a discussion about the provisions above. All kinds of companies are offering us CPA’s continuing education on the subject. I anticipate taking this course and will update you as well, especially on part II.
Keep in mind the information was taken from a www.cnmnewsnetwork.com.
As always I appreciate your comments and experiences.
Evelyn Edwards,CPA PLLC
512-917-2674

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Fresh out of high school, students are forced to borrow and borrow and borrow until the funds are exhausted. Most students are coming out of college already in serious debt that will take years to repay. Everyone will argue that student loans are the best debt you can have and they’re right. It’s a great investment but college is only getting more and more expensive and student loans are getting harder to get. If you’re lucky you can qualify for federal student loans but if you’re not you have to get private loans. Private loans are more risky because they have higher interest rates with no cap. Federal loans at least have an interest rate cap. But what’s a student to do? The cost of living is rising and the cost of school is rising along with it. Luckily, the president proposed the new student loan forgiveness program in his recent State of the Union address. But rest assured that there are other options that you have in paying for college.

So, what should you do as a parent?

First off, if you can’t afford it don’t do it. Some parents are dipping into their retirement to pay for their son/daughter’s education and that isn’t a good idea. Have them fill out a Free Application for Federal Student Aid (FAFSA) to see if they can get federal loans or grants. Grants and scholarships are still in arms reach and are possible to get.

Second, look at your options. Look at the differences between federal and student loans, look at interest rates, and figure out how long it will take to pay the loans off. Another possibility is a parent loan; they are more pricey than a regular federal student loan but are better than private loans. In some cases it might help your son or daughter to cosign their loan; having a cosigner with good credit can lower their interest rate and give them a better chance of receiving the loan.

Third, help your kids only as much as you can. If you can’t afford to pay for their school, maybe buy them a week’s supply of groceries or a tank of gas.

And lastly, encourage them to find a good school that doesn’t cost an arm and a leg but respect their decision to go wherever they want.

As a student:

Attend a community college for the first two years of your education.  It’s very likely that you will not have to take out any loans during these two years.  The cost of education at a community college is much cheaper than at a four year institution.  It’s not uncommon that professors at a four year institution teach at the local community college as well.  It’s also possible that most, if not all of the classes are transferrable to a four year university.

Give yourself time. The credit crisis has hit lenders hard and finding money when everyone else is looking for it is extremely difficult. Apply for the loans with plenty of time so if you get turned down for one you’ll be able to look for others. Keep in mind that emergency tuition loans are outrageously expensive!

Pay attention to interest! Be careful of how much you’re borrowing. Don’t borrow more than you absolutely need to, remember you have to pay them back one day and finding a job is difficult.

Work as much as you can without falling back on your studies. Find a part time job at the mall or waiting tables, and use that money as your living money. You shouldn’t take out loans to cover your groceries or other necessities.

Minimize living expenses as much as possible. Live with roommates or find a small studio apartment. Most college town apartments have roommate matching.

Also, be willing to stretch out the period you will attend.  This will allow you to work and still pay for tuition.

Make sure that your loan payments are manageable. Be mindful of payback, student loan debt can’t be erased even with a bankruptcy.

Don’t resort to credit cards. Credit card use is at an all time high among college students; don’t drown yourself in more debt.

Ask family members to help pay for your books.  Most people will agree to this because the cost of books is very manageable compared to tuition.

Research different colleges and universities, $15,000 a semester for that private university may not seem a lot because you’re not paying it right away but think of it in a few years with the interest adding up.

Become a Resident Assistant (RA) at your dorm. RAs are lucky enough to receive free room and board and you can do it up until you graduate.

Participate in a sport that may qualify you for an athletic scholarship.

You can also get a teaching position at the university that will offset your tuition.  And if you have children you can cover their expenses because you’re an employee there.

Take advantage of the education credit.  This could create a refund that you could use to pay for tuition.  Or better yet, if you do get student loans to help pay for tuition you can give this money to a family member that will allow them to take the education credit and then pass on the savings to you.

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 The recession has caused many companies to have to lay off their workers. Employees that once enjoyed great benefits and top pay were forced to give all of that up. The economy has affected nearly everyone in some way. Losing that income has caused health and stress problems. The question today is how to survive on lower income.

1.   Watch what you’re spending.

Financial software such as Quicken can show you exactly how much you’re paying for everything from entertainment to gas. Looking at these figures can help you see where you need to cut. If you don’t have the software make an Excel sheet, compare how much you make to how much you’re spending. This may be a big wake up call.

2.   Create a family budget and stick to it.

Hold a family meeting and discuss how you can cut back on spending. Do you really have to see the new movie in theaters or can you wait until it’s out on Netflix?

3.   Stop using plastic.

Using cash is much better than swiping your debit or credit card. When you use cash there is an emotional trigger, it hurts to break that twenty on a cup of coffee. People are much more likely to swipe a card on an unnecessary item than pay cash for it.

4.   Spend more time at the grocery store.

Store brands are cheaper than name brands. Great Value and HEB brands carry most products but are cheaper than brands with the fancy name. Watch for even the tiniest savings.

5.   Clip coupons.

Coupon clipping has become easier over the past few years thanks to the internet. Websites do all the dirty work for you and all you have to do is press print. It’s a great, easy way to save.

6.   Cut costs.

Do you really want to waste the gas to get your favorite food or can you make something at home? Fast food is both unhealthy and expensive. Make going out a rarity. If you need new clothes for interviews, hit the clearance racks or buy used. Carry a shopping list with you and only buy what’s on it.

7.   Always remember, the best things in life are free!

Focus on friends to give you moral support. Spend time with people you love. Exercise is a great way to make yourself feel better about your circumstances. Going to the park is great for recreation. Austin can help you enjoy the beautiful things in life and it’s free!

 I hope these tips can help you during a difficult time in your life. As always, I’m here to help.

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Saving in a tough economy or when you’re living paycheck to paycheck seems like it would be extremely difficult. Now that the holidays are over and you don’t have to spend more on everyone else, it’s time to focus on you. Saving itself isn’t hard at all; it’s the discipline it takes to save that causes people to worry about the next health problem or the new windshield you might need. Millions of Americans are forced to live paycheck to paycheck but that’s at their own fault. It is possible to save. Even a person working minimum wage can have savings. After careful consideration, I have come up with a few tips and tricks to help you save without changing your lifestyle.

First of all, savings should be your first priority. Before bills and other non-necessities, make sure to transfer money into your savings. Savings can protect you from a bankruptcy! The leading cause of bankruptcy are medical bills and with a savings you have at least that to fall back on in case anything were to happen to you or to any of your family members.

Second, save as much or as little as you can. Even the change in your pocket can add up. Saving 50 cents a day can add up to $182 in a year. That is money that could have otherwise gone to McDonalds or to Sonic happy hour.

Third, have a savings account that requires at least 48 hours before you can have access to the money. This extra time forces you to think about big purchases before you regret them later. Do you really need that brand new Coach purse or is the one you have now doing just fine? Is a huge HDTV really necessary or can you see just fine from the old one in your living room?

Fourth, set a goal! Setting a goal can help you be more motivated. A $1,000 goal is a great start. One summer we had our AC break down during the extreme heat of August. We couldn’t use it at all, we were absolutely miserable. It cost us over a thousand dollars to fix. Because we didn’t have a savings we were forced to pay other bills late. From then on, we focused our efforts on building the $1,000 savings. It took about a year, but we did it and continue to keep it. It’s also a great idea to attach your savings to your checking account. Most banks offer complete overdraft protection that can save you hundreds of dollars in NSF fees. It gives you peace of mind and that is priceless!!

And, finally, never stop saving. Life throws out many curve balls and you must be prepared for the worst. Prepare yourself for your retirement as well. The bottom line is that you must always be ready for anything.

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I have a new topic that I think you’ll be interested in.

“Fear”

I keep having experiences where I’ve had the opportunity to overcome fear.  Most of the time I do.

I heard recently fear is something that we all have in common.  Its the thread that binds us all.  At least it can be in a positive way if we help each other to overcome them.  I’m thinking that there must be someone out there that has overcome the very fear we are experiencing.

As you probably know fear stands for “False Events Appearing Real”. So most of the time its in our thinking that makes it seem so real.

I believe this is the number one way that the “evil one” takes hold of us.  So when it happens, I stop, take note, write about it and call a friend i  trust

And of course, I pray about it.

Here’s a perfect example of how i overcame the fear of not knowing what to do on a clients books.

I met a woman from my website that needed help with bookkeeping and taxes.  I got so excited when i met her i did not take time as to whether i should be afraid or not.  I did think that I had another client that manages inventory and that this would the perfect client to work with next.

Then I remembered that I have avoided clients with inventory because it was a difficult subject in college for me. Yipes!  it was too late to turn around. Ok I have a couple of people in the CPA world that can help me. And I can always call Quickbooks to assist me as well.

Then I made a list of all the situations about this client that were new to me. I don’t know if that was good or bad but i found myself in fear over it. Yuk!  Oftentimes I wake up in fear, so it helps to pray myself out of bed:).

It  always helps to write about my day before bed. It usually has some fear associated with it.  Its a bad idea to go to bed in fear.  The evil one preys on us when we sleep (How cunning!).

So, as I started to work with this client, I noticed that its problems were not associated with inventory but bank reconciliations,tax returns and IRS representation. Those areas I am very qualified in.

Also, as I was already hired on,IRS came knocking at their door.  They were terrified but I was excited.  I knew I could help them and they would be willing to pay me top dollar.  They did and its going very well.

I have more examples and exercises I use to overcome fear.  I’d like to share these with you. And by all means, share you successes with us.

Next topic:Valuable exercise to over come fear

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