John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance, tax

How to Plan Your Income for Retirement

Planning for retirement is important if you want to cope with life after your days in the office. According to the Employee Benefit Research Institute, 4 out of 10 American workers are saving money for their retirement. Do you want to be part of these smart employees or the lost majority? Here are some of the things you need to know about preparing for retirement.

Setting Financial Goals
Saving is a process that demands commitment. Since retirement is definitely not your only saving goal, you should try striking a balance or prioritizing what is necessary and weighty. For instance, you could comfortably do away with lingering debts and saving for vacations, cars, homes, and lattes.

Saving for Retirement
Retirement involves more than just assessing the amount of saving you need. When planning for retirement, it’s is also important that you pay attention to where you save your money. Find the best investment or saving account. Take time to calculate how much you need to save for retirement as well.

Investing
While saving is simply amassing wealth, investing is the process of multiplying the wealth. Cash is not a great way to store your wealth, and there are thousands of reasons why. Before investing your money in any project, assess the reward-to-risk ratio and the return on investment. Which investments are more diversified, and when do you get in for maximum gains.

What Do You Invest In?
Are you ready to have your retirement saving work for you? Well, if that’s the case, setting up an investment portfolio should not be complicated. Acquaint yourself with principal retirement investment rules. Are you a DIY person, or will you need to hire the services of a financial adviser? If you want to manage your retirement saving yourself, it is recommended that you gather sufficient knowledge on investment strategies. If you will choose to work with a professional, get to know about the related costs.

Building Wealth
Retirement investing is not a phenomenon that occurs in one sitting. It is a process that will change with the dynamics of your employment as you move from one job to another or up the promotion ladder. You will also have to endure changes in the stock markets and meet family obligations. However, that does not necessarily mean that you will have to babysit your retirement investment. There are numerous ways to protect and manage your wealth and savings in the long haul.

This article was originally published on JBowmanAccountant.net

Standard
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.

Standard
blog, John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance, tax

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.

Standard
blog, John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance, tax

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

Standard
blog, John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance, tax

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

Standard
blog, John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance, tax

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

Standard
blog, personal finance

EXPENSES THAT COULD HARM YOUR RETIREMENT SAVINGS

If you have a good amount of money in your retirement savings account, you may feel like you’re ready when retirement comes. It’s natural to feel that way when so many senior citizens all around the world end up working past retirement age due to not having much money in their savings. However, you should be concerned about a few expenses you may run into.

With these expenses, you could end up emptying your retirement savings account at a rate much faster than you were expecting. Take note of these expenses you may run into once you retire.

Healthcare

Whether you’re healthy now or not, healthcare can easily become one of the most expensive things to worry about once you’re retired. The reason for this is that older people generally need to take care of themselves more, whether it be through regular checkups, surgeries, and much more. To help you with this, you should think about opening a health savings account.

With a health savings account, you can save thousands of dollars regularly since this account can be used for medical purposes without having to pay taxes. If you feel like you are too close to retirement to build your health savings account, make sure you look into various Medicare coverage plans so you’re covered in case anything happens to you. Ensure that you look into saving money for healthcare before you end up retiring.

Long-Term Care

As you get older, you might find it harder to take care of yourself. This can be a difficult period as you might still want your freedom, but you might start having to pay some else to take care of you when you’re older. This can be very costly though where you don’t want to expect your children to pay tens of thousands every year just to keep you in good care.

By saving money for long-term care, you’ll feel ok knowing that you’re always going to have your housing, food, and other care taken care of without finding some solution to pay for your life. Just make sure you look into long-term care solutions before you end up getting too old, as you want to find a long-term care system that isn’t going to scam you financially. Make sure you save up for long-term care so you’re covered once you retire.

Standard
blog, John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance

Debunking Personal Finance Myths

Personal finance is one of the most fundamental topics and aspects of our individual lives. Much has been said regarding how to practice good personal finance practices. Unfortunately, some of the information available out there is rooted in misconception. Here is an overview of some of the commonly perpetuated myths about personal finance.

“To make an investment, you need to be rich”

This misconception is based on the fact that most investments today are capital-intensive. One does not, however, have to be rich to successfully establish a business, as there are numerous options to source for startup capital. In addition, one can start a successful business with minimal savings and gradually advance the investment portfolio.

Read the full blog at JBowmanAccountant.info.

Standard
blog, John J. Bowman Jr Accountant, John J. Bowman Jr. Accountant, personal finance

Finance Tips for the Holiday Season

The holiday season can get pretty expensive. Starting with candy and costumes for family and neighbors in October, followed by a feast of food in November and all of the gifts, gatherings, and extras around the winter holiday season, bills can really add up. Unfortunately, your wallet may not be able to keep up with the hustle and bustle of the holiday season. There are several ways to help you save money while still allowing you to delight in the magic and wonder of the holidays.

Set a budget

It’s easy to spend money when you don’t try to set a cap on how much you’re allowed to spend. Without a budget, you’ll be more likely to overspend. Sit down and work numbers before even setting foot in a store so you know exactly how much you have to spend. On average, people spend around $704 during the holiday season, but that is all dependent on an individual’s personal financial situation.

Do your research

Everyone is going to be advertising that they have the best deal on a specific product during the holiday season. It’s up to you to do your homework and see who’s actually telling the truth. You can comparison shop right from the comfort of your own home by looking up prices online. That way, you’ll know you’re getting the best deal.

To read the full blog, visit JBowmanAccountant.org.

Standard