John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant

Winter Home Maintenance Tips

With colder weather on the way, it’s imperative for homeowners to ensure their homes are in tip-top shape before the worst of winter hits. Here are some of the top 3 winter home maintenance tips.

1. Clean Up Your Foliage

The number one issues with having trees or shrubbery growing on a property are their potential for damage during harsh weather or if they become weighed down by things like snow. To mitigate the damage to a home or property, it’s a good idea to trim back the dead or overgrown trees and shrubs. Making these things more manageable will clean up the area around a home that could pose a danger.

Additionally, cleaning up the fallen leaves or branches from a home’s gutters or downspouts is equally as essential as trimming the source of the cloggers.

2. Check Your Home for Weatherproofing

Performing a routine check on a home’s roof or windows could end up saving a homeowner some of the cost of keeping a house warm. Whether a homeowner employs the help of a roofing company to do an inspection or they climb up a ladder to do it themselves, checking a home’s roof for broken or missing shingles could mean the difference between a frozen puddle in the kitchen and a warm household.

In addition to the roof, checking or re-sealing the windows will assist in keeping the cold out and the heat in once those frozen winter months settle in.

3. Pumps & Pipes

Testing and unclogging a sump pump if a home has one could prevent a flooding disaster before it happens. Every homeowner with a sump pump would be wise to check it before the frozen months set in.

Additionally, freeze-proofing pipes could mean the difference between burst pipes and warm running water during the coldest weather. Whether a homeowner treats this by running a trickle of water overnight or installing insulation around the pipes is largely subjective but highly recommended.

Keeping a Home Safe

Winter is coming, and with it, homeowners need to gear up to maintain their homes and ensure the safety of everything inside. Some of the best winter home maintenance tips are everyday things that make a big difference.

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The Intersection Between Personal Finance and Technology

Technology and personal finance have gone hand in hand for years. From the ATM to mobile banking, there are many ways that technology has helped people manage their finances more efficiently. They can use their smartphone to track expenses, compare prices at different stores, and even deposit checks from the comfort of their home. With so much information and services available online these days, it’s never been easier for people to keep on top of their money. Here are ways in which technology has allowed access, portability, and flexibility in personal finance.

Accessing money

Technology has made it easier than ever to access money. People can get cash from ATMs anywhere, use mobile banking to check account balances and transfer funds, and even deposit checks with a smartphone app. There are also so many websites helping people manage their money online by tracking expenses or finding the best deals on products at different stores.

Automated withdrawal for savings

It can be tough to put some extra money away every month when there are so many other expenses competing for attention. With an automated savings plan, someone can set up automatic withdrawals from your checking account into a separate one where they save money regularly without having to think about it.

Automated bills payments

There are plenty of services that help people pay their bills. They schedule payments to ensure all their bills get paid automatically and on time, without hassle. Services like Venmo and PayPal also allow people to send money over the internet faster than mailing a check or setting up an online bank transfer.

Using a budget to manage spending

People can use a budgeting application to track all of their monthly expenses and income, which will help them get a clear picture of where their money is going. It’s also easier than ever before to automate saving for certain things like vacations or home improvements so that they’re never forgotten about. With these tools at people’s disposal, it is easy enough to keep on top of their finances without having too much stress from looking at the numbers every day.

Technology is all about simplifying life. With technology being incorporated into banking more and more, people can get a lot done from the comfort of their couch. Besides helping people adopt better spending habits, technology is also helping them save money that they would otherwise spend without the help of money management apps and sites.

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California and Tennessee to Receive Tax Relief Following Disasters

California and Tennessee have been plagued by natural disasters in recent weeks. Californians have been affected by massive wildfires, while Tennesseeans have struggled with storm damage. In light of this, the federal government is offering affected citizens some tax relief options.

California wildfire victims residing in the counties of Lassen, Placer, Plumas, or Nevada, have until November 15th, 2021 to file individual and business returns or payments. This includes quarterly tax payments, excise tax returns, and quarterly payroll. November 15th will also serve as the new deadline for those who had received an extension on their 2020 returns.

Penalties on payments that were due between July 14th and July 29th of 2021 will also be forgiven if the payments were made by July 29.

Tennessee residents or business owners who were impacted by storm damage in Houston, Dickson, Humphreys, or Hickman county also qualify for tax relief. Those who had received an extension to their 2020 returns will now have until January 3rd, 2022 to file. That is also the new deadline for the quarterly tax payments that would’ve normally been due in September of 2021.

Penalties on payments that were due between August 21st and September 7th of 2021 will be dropped if the payments were made by September 7th of 2021.

If you’re a victim of the California fires or Tennessee storms and you receive a notice from the IRS that you’re being penalized for late filing or late payment but you believe you qualify for the tax extensions, you can contact the number on the notice. Explain your situation and they’ll be able to help you determine if you are eligible and if you are, they can remove the penalty from your file.

The IRS is making every attempt to automatically identify taxpayers who reside in the areas covered by the disaster extensions. When they identify these people, they apply the filing and payment relief options to their accounts. This means, that if you live in the affected areas mentioned, you shouldn’t need to contact the IRS to receive your tax extension.

If however, you are a victim of the fires or storm damage that lives outside of the mentioned counties, you will need to contact the IRS at (866) 562-5227 to request the tax relief.

This article was originally published on JBowmanAccountant.net

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Tax Breaks for Homeowners

While there are many opportunities to create financial wealth and safety in America, few are as powerful as owning a home. Even with decades of mortgage payments, the relative size of those payments usually declines over time as wages rise but the payments stay flat. Also, home values tend to go up over time, representing another way to secure wealth in a home.

Once a mortgage is paid off, families own their own homes and just have to pay taxes and maintenance, seriously freeing their regular income from one of life’s biggest expenses. The advantages don’t stop there. Multiple law enforcement agencies and municipal governments have learned that crime goes way down in communities where at least a third of the residents own their homes as compared to renting.

Buying a home isn’t cheap. In fact, it’s often the biggest single expense most families will make in their lifetimes. Fortunately, there are many tax breaks homeowners can use to make things more affordable.

While there are many opportunities to create financial wealth and safety in America, few are as powerful as owning a home. Even with decades of mortgage payments, the relative size of those payments usually declines over time as wages rise but the payments stay flat. Also, home values tend to go up over time, representing another way to secure wealth in a home.

Once a mortgage is paid off, families own their own homes and just have to pay taxes and maintenance, seriously freeing their regular income from one of life’s biggest expenses. The advantages don’t stop there. Multiple law enforcement agencies and municipal governments have learned that crime goes way down in communities where at least a third of the residents own their homes as compared to renting.

Buying a home isn’t cheap. In fact, it’s often the biggest single expense most families will make in their lifetimes. Fortunately, there are many tax breaks homeowners can use to make things more affordable.

  1. Capital Gains: If you sell your home and profit from it, then capital gains taxes might apply. However, if it was your primary residence, you might be able to keep capital gains without them getting taxed.
  2. Discount Points: When you get a mortgage, you might get to buy discount points that lower the interest rate applied to the loan. Points you buy to lower the interest rate are tax-deductible.
  3. Home Equity Loan Interest: This is just like having a second mortgage. You can deduct the interest you pay on a home equity loan if you took the funds for home improvements.
  4. Home Office Costs: The actual details are up to the IRS on this one, but home office space might get you tax breaks.
  5. Mortgage Insurance: Also known as PMI or private mortgage insurance, it’s there to give your lender protection if you can’t keep up with mortgage payments. You can itemize the cost of this insurance.
  6. Mortgage Interest: The mortgage interest deduction lets you lower taxable income if you do an itemized deduction.
  7. Necessary Improvements: The scope of what is ‘necessary’ is up to the IRS, unfortunately, but certain improvements can qualify as tax deductions.
  8. Property Taxes: These are often applied at the state and municipal levels. Depending on how you file, you can deduct $5,000 to $10,000 from your federal taxes.

This article was originally published on JBowmanAccountant.net

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What to Know About Taxes and Retirement Income

Taxes are one of the most important things to consider when saving for retirement. The way you are taxed depends on the instruments you’re using to save. Sometimes, savers are taxed at the time they put money away. At other times, their contributions are tax-free, but taxes are scheduled to be collected when they’re distributed down the line. It’s important for people to understand a little about how this all works. It can prevent unpleasant surprises in the future.

Former federal employees will find that their FERS annuity is taxed like regular income at the federal level. Depending on the state, it can be taxed at that level, too. Over 80% of retirees’ Social Security payments are also taxable as ordinary income. People can elect to have taxes withheld from their payments, but that doesn’t happen automatically. If not, they will have to pay at tax time. People should make this decision carefully, ideally after talking with a financial advisor.

Retirement accounts that people may contribute to taking different approaches to taxes. With a Roth IRA, account holders pay taxes upfront, when they make deposits. Later, their withdrawals in retirement are tax-free. This is essentially the opposite of a traditional IRA. Contributions are tax-advantage, but distributions are taxed later on. Some people maintain both types of accounts, in order to reap the tax advantages on both ends.

401(k) and 403(b) are popular retirement plans that are offered by employers to their workers. 401(k)s are generally available from for-profit companies, and 403(b)s from charities and religious organizations. These plans offer tax benefits upfront. Employers take money from each paycheck on a pre-tax basis and place it in a plan where the money grows for the account holder. Generally, 401(k) distributions are taxed as normal income. There are Roth 401(k) accounts available, and contributions to those are taxed.

Retirement planning is complicated. It’s important that every worker keeps one eye on the future and considers what they want their retirement years to look at. Being more aggressive, and taking advantage of some Roth-style accounts, can be a good idea for many American workers. Speaking with a financial advisor about these decisions can be prudent.

This article was originally published on JBowmanAccountant.org

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Four Purchases That Should Never be Made With a Debit Card

Although debit cards are extremely convenient, they aren’t always the right choice for payments. Under some circumstances, it’s actually more beneficial to use a credit card. Here are four things that should always be paid for with a credit card instead of a debit card.

Furniture and Appliances

Large home purchases, such as furniture and appliances, should always be made with a credit card. These purchases are large enough that a mistake by the delivery team or the manufacturer can cost buyers thousands of dollars. With a credit card, it’s possible to dispute the charges, even if the seller isn’t willing to arrange a refund directly. In addition, the size of these purchases means that even 1-2 percent cashback will add up to a considerable sum of money.

Car Rentals

When renting a car, it’s almost imperative to use a credit card. Even if the rental company will allow renters to pay with a debit card, they should expect to pay a large additional fee in order to do so. Rental car companies also tend to run credit checks on renters who pay with debit cards. This, in turn, can cause damage to the renter’s credit score by adding an unnecessary hard inquiry. To avoid this hassle and expense, anyone renting a car should be prepared to pay with a credit card.

Recurring Payments

People with memberships and subscriptions often make the mistake of billing their bank accounts directly through their debit cards. While there’s little risk of losing money this way, credit card rewards on these recurring payments can add up over time to significant amounts. Points, miles, and cashback rewards can all be built on recurring payments with no extra effort. Given this fact, it rarely makes sense to make these recurring payments using anything other than a credit card.

Online Purchases

Unfortunately, online scams are everywhere these days. Sellers who bait and switch their buyers or fail to deliver at all are quite common, even on major online platforms. Credit cards offer a degree of protection against this kind of behavior by allowing buyers to dispute charges and get their money back.

While debit cards certainly have their place, they aren’t for everything. These four types of purchases are generally best made with credit cards, as debit cards introduce higher risks or lower rewards in these cases.

This article was originally published on JBowmanAccountant.org

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HOW TO SAVE MORE BASED ON YOUR INCOME

Do you want to be able to save more but don’t know where to start? If so, then this article is for you. First, we’ll talk about how your income affects the amount of money you can save each month.

From there, we will go over different strategies that can help you increase your savings rate and get closer to your goal of saving a certain percentage of your income each year!

CREATE A BUDGET TO SAVE MORE MONEY

The fastest way to save more is by reducing your expenses. Start by creating a budget and tracking your spending habits. This will help you identify areas where you can reduce expenses to increase the amount of money that goes towards savings each month.

Here are some specific ways in which you could create a budget:

  • Figure out how much income is coming in per hour or day so that it’s easier to know what percentage needs to go into saving each week, month, etc.
  • List all monthly fixed costs such as mortgage/rent, utilities, insurance payments, and taxes; then list variable costs from there like food or entertainment

GET A SAVINGS ACCOUNT

It’s also a great idea to open a savings account. In general, the higher your interest rate is on an account, the more money you will save in that given time period.

MAKE SAVING AUTOMATIC

It’s easier to take care of something when it becomes habitual – so get into the habit of automatically transferring a particular percentage of your paycheck directly into a savings or retirement account at work each month. Once this practice has become established for about six months and feels natural, adjust how much you’re saving by increasing or decreasing the amount you transfer based on what goals you’ve set for yourself.

For example, if health insurance premiums are going up next year, but there isn’t enough money saved yet to cover them, make adjustments now before it worsens!

SETTING GOALS

Set goals each month for your savings account and budget. Your goals might include putting aside an emergency fund, paying off student loans, or saving for a house.

It’s hard to know what you’ll need in the future, so it helps to consider all possible expenses and make sure there is enough money saved each month that can be used when necessary.

Your savings rate should increase as your income increases! Make adjustments as needed based on how much more you’re earning per year (as well as any other factors).

This article was originally published on John Bowman’s website.

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The Biggest Financial Decisions You Will Make

Most individuals have had to readjust their lives occasionally to meet various financial needs. Making the right financial decisions is critical to surviving unforeseen financial constraints. Below are suggestions on the most significant financial decisions one can make towards achieving financial stability:

PAY YOUR DEBTS

Once your financial situation stabilizes, make a payment plan in order to pay off debts. Not paying off your debts can start to affect other aspects of your life, such as taking out loans for buying a home or a business. It can be wise to involve a debtor advisor that can look at your financial situation holistically and tell you exactly how you can go about paying your existing debts in a timely manner that will work for you.

INVEST

Investing your finances at a young age can be one of the best decisions you’ll ever make if you go about it the right way. Putting your money in a bank is one way you can invest, but the problem is that you gain a small amount of interest when doing this. The best way to grow your wealth by investing is by investing in the stock market. Depending on how you go about it, this can be a risky decision so be sure to do your research and ask financial advisors for their input to ensure you’re going about it properly.  A high-risk return investment has a higher return than a lower-risk investment that pays less, but they’re also not likely to lose money in the short term. 

BUY A HOUSE

One of the most significant financial achievements for many is buying a house. A home gives equity so that one doesn’t have to pay rent anymore. At the same time, it can be an income-generating project since it can be rented or sold at a profitable price. Settling in one place for a long time gives one a sense of entitlement, no more moving from one place to another.

LIVE WITHIN ONE’S MEANS

Living within one’s income is the best decision one can make early in life. It helps in managing finances and staying out of debt. Yet again, set aside a portion of the salary and deposit in a fixed savings account that is beyond reach. Have a budget for every expenditure, be it food, transport, or rent. It will help in cutting down on costs and save more.

Financial decisions are complex and not easy to adhere to, but with a little patience, discipline, and focus, you’ll be well off.

This article was originally published on John Bowman’s website.

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5 INVESTMENT BOOKS FOR BEGINNERS

Investing can be overwhelming, particularly if an individual is just getting started. If you’re a novice investor and unsure of the right option for your portfolio, the following are the top 5 investing books.

THE LITTLE BOOK THAT STILL BEATS THE MARKET

In this investment book, Joel Greenblatt provides a quick training course in investing. He discusses why so many people struggle to profit from their investments and what tactics can be used in the stock market. In addition, he offers his proprietary formula, low-cost stocks, and efficiency metrics. Overall, Joel lays a solid base for every new investor, and he does so in an easy-to-understand manner.

A RANDOM WALK DOWN WALL STREET

Burton Malkiel tackles a host of investment methods, principles, maxims, and mythologies in his book. His book provides information regarding cost-efficient index funds and how they are more beneficial to an investor than other stock-picking approaches. Retirement and 401K strategies are also explained in this book.

MILLIONAIRE TEACHER: THE NINE RULES OF WEALTH YOU SHOULD HAVE LEARNED IN SCHOOL

The author of this book, Andrew Hallam, was a former English teacher who became a millionaire by investing. He discusses in depth the various methods he used to become financially successful in his book. According to the author, if an investor uses his plan for less than sixty minutes annually, the investor will outperform professional investors. His book delves into index funds, stock market operations, and how to make informed investment decisions without wasting time staring at the ticker.

THE SIMPLE PATH TO WEALTH

This book is interesting in that it contains writings from the author to his daughter about investment strategies. The letters also explained the importance of investing while young. This book clarifies financial fundamentals such as the worth of capital and debt. A beginner investor can, of course, learn the fundamentals of the stock market. It’s a fast read that delves into the specifics of how the investor can better their financial condition.

THE BOGLEHEADS’ GUIDE TO INVESTING

This book offers solid investment advice on subjects like diversification and the importance of emotional self-control when it comes to investing. This book also emphasizes the importance of investing less than the investor earns in order to save money for investment. This book not only offers investment advice but also suggests ways to improve one’s financial situation.

This article was originally published on John Bowman’s website .

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