Sales Tax Deductions

Yes, sales tax deductions are alive and well through 2011 tax years. The IRS requires that you make a choice between writing off your state income tax or sales tax. For those of you that live in Texas or other states that have no state income tax this is an easy choice to make. However, If you are required to file a state income tax be sure to look into your states available deductions. They may allow for sales tax deductions.

So... how much do you pay a year in sales tax? Great question right? I tried one year to start saving all our receipts in a shoe box. It didn't happen. So I tried to keep track of just the "Big" expenditures to write off (Which is allowed). I'm always looking for ways of doing things better and a few month ago I discovered a product that becomes my shoe box. Some of you may have seen the TV commercial featuring "Neat Desk". I decided to give this product a try and used there free 30 day trial.

Neat Desk is basically a scanner linked to software that does some pretty cool stuff. I already have a scanner so I wasn't that excited to have another scanner on my desk if you know what I mean. And I already use quicken in keeping track of our books. However, the software is what makes this product unique. It's a time saver! For me it does 2 things really great.

1. It scans in my receipts and stores each one in desired folder. Automatically reads the receipts and posts vendor, date, sales tax, and total. I just trouble shoot a little bit.
   Totals up sales taxes and receipts totals. Very cool in organizing all receipts for business and personal.
2. Scan several documents to folders I desire to have. This clearly cleans my desk off! Love this feature!

Like any product there are other features that you might enjoy but as I said, I primarily purchased this product to easily keep track of my sales tax receipts and not be a burden to recall these receipts and retrieve totals. When making your decision to purchase keep in mind that the sales deduction has not been extended to 2012 by congress yet. There is a possibility this deduction could go away in our current economic situation. I always wanted to know how much I payed in sales taxes for the year and this product will help me with that.

Be sure to check with your professional accountant on sales tax deductions.

Dave Alexander

Health Savings Accounts

With all the talk this year on health care I thought I would share a little bit on some things that can help in medical coverage. For many years  I have enjoyed very good medical care from my employer and haven't had to shop around for medical coverage. Of course times have changed and Patti & I are both self employed.

What is interesting is that you have to carefully look at what you spend each year on medical, dental and Rx. Also, include your share of the medical cost after insurance has been applied. We chose a high deductible to reduce the outflow of cash because the monthly premiums were to high to justify.

If your like us and have medical and dental expenses that are less that 7.5% of your annual income you won't be able to write any of these expense off on your taxes. Your only able to write off in medical & dental expenses beyond 7.5%. Example: If you make $100,000 annually. The first $7,500 is completely out of pocket, you are not able to write this off on your taxes. If you spent 8,000 in one year on medical & dental you would get to write off $500 because it exceeds the 7.5% of adjusted income.

This is why we like the Health Savings Account (HSA). HSA's allow you to deposit funds to a limited amount each year that is not subject to the Federal Income Tax. When you open an HSA you get an HSA debit/credit card that you use on your medical, dental and prescriptions for the year. What you don't spend rolls over to the next year and so on. It's kind of like being self insured, but your basically building a savings account upfront on purchases you spend anyway through-out the course of the year.

Let me try another example: The average grocery store shopper will spend $7,000 per year on groceries to feed there families. That is about $583 per month. We know you can't write off your groceries, but if there was a special Food Savings Plan that gave you that ability reduce your taxable income you would be all over it.

I know this is a little out in left field but the point I'm trying to make is that you will spend money on your Medical and Dental insurance deductibles each year. You will have medical expenses that insurance won't cover. You will most likely have out of pocket prescription expenses through-out the year. If you don't the savings will roll over and you'll have it the next year. And you'll be taking full advantage of the tax breaks and reducing your tax burdens.

Dave Alexander
JustGoFishin.com
Corpus Christi, Texas

The Mormon Way Of Doing Business

Many of you know that I enjoy reading books about business leaders and recently financial advice books.  It's always good to build upon your education in Business and Finance. Some books that  I would recommend are:

• Rudy Giuliani's book "Leadership"
• "The Warren Buffet Way" by Robert Hagstrom
• "The Tipping Point" by Malcolm Gladwell
• Mitt Romney's "Turnaround". 

Those family members that know me... know that I'm not a person that likes to read. In fact I have to admit I have poor reading habits. But these kinds of books just make me want to learn more about their achievements. How they accomplished terrific results and I could apply these principles.

Patti bought a book for me that she new I wanted to read before our trip to New York. The book was "The Mormon Way Of Doing Business". We know that there are many leaders that have been successful over the years that are not of the LDS faith. But this book looks into Mormon leaders that have reached the pinnacle of their careers.

I really enjoyed this book and how these leaders balanced there lives around family, work and church responsibilities. Patti new Kevin Rollins, CEO of Dell. He was in her LDS Ward in Austin.

This book also captures the passion these leaders had for their companies and not getting caught up in the money and power of there title's. 

Dave Alexander
JustGoFishin.com
Corpus Christi, TX

THROW IT AWAY!

Some great suggestions for the New Year: by our D.R. Garrison, CPA, PC

As a general rule, we human beings are collectors. We collect everything. We save “stuff” we won’t ever need and that has no intrinsic value. Getting your finances in order means parting with some of these “treasures”. A list of what you should keep:

1. Federal and State Income tax returns. (To prove you filed.)
2. Investment Information. (What you bought, When you bought it, cost, When & How much sold for.)
3. Retirement Account Records. (Keep year end recaps after verification of activity to prove after tax contributions and trustee accuracy)
4. Insurance Policies. (Toss 2 years after terminated.)
5. Trusts and other Estate Planning Information.
6. Medical Records. (Unless needed for income taxes, toss receipts, etc.)
7. Credit card receipts and Statements. (For one year only).
8. Household Bills & Receipts. (Only keep for possible income tax records such as child care.)
9. Cancelled Checks, ATM receipts, Bank Statements. (Statements & cancelled checks should be kept for no more than 6 years. ATM receipts kept only long enough to match to the bank statements.)
10. Mortgage, Home Equity loan, Second Mortgage, Property Tax records. (Year end recaps should be kept for 6 years after you sell the property.)
11. Home Sale/purchase records. (Keep for 6 years after the sale of property.)

Everyone should have: 1) Current list of accounts & assets. 2) A living Will. 3) A durable power of attorney for health care. 4) A durable power of attorney for financial matters.

FISCAL FITNESS WORKOUT

Here is a workout designed to put you in top fiscal fitness. Year end is a great time to assess your financial condition and begin a training regimen. Here are some exercises that will help you stay in optimum financial shape.

• Warm Up With a Meeting. Meet with your financial planner and develop your 2010 plan.
• Slim Down Spending. Maintaining a budget is the only way to track and control your spending.
• Stretch to Contribute More to Retirement Savings Plans. A comfortable retirement requires active planning and deliberate savings.
• Reduce Credit Card Debt. Paying interest on debt means you are voluntarily paying more for your purchases.
• Run For Coverage. Carefully choose among the insurance coverage choices available to you.
• Get a Personal Trainer. Everyone should have a handle on their financial condition. If your spouse has been handling your financial matters it’s important for you to at least learn the basics. Make time for your spouse to train you or get up to speed with a financial professional.

Inventory Everything You Own. Be sure to take photos, digital or traditional, or video everything you own. Store this data away from your home in a secure place. This pictorial record may prove crucial in the event of a fire or theft.

Get Moving on Managing Your Credit History. Everyone needs a credit history. Be sure each spouse establishes a separate credit history. Review your credit reports on a regular basis.

Power Up Your Legal Documents. A durable Power of Attorney, a Health Care Directive and a Will are the minimum essentials.

Organize Your Financial Records. Keeping financial records in an organized manner can save you time, money and trouble. Be sure your spouse, family and executor are aware where these records are stored.

Sue Shaw
Home Owners Welcome, LLC
Logan, Utah

Financial & Food Storage Security for Individuals and Families

Fantastic Idea Patti and Dave! The most important information I can give anyone is to store food and fuel for one year. This will assure you can still take care of yourself and family if you lose a job or are financially hurt in anyway. We have a piece of mind knowing that we can feed our family if anything happens whether it is financial (The recession we are all experiencing) or natural disaster (such as earthquake, extreme winter weather, flood, tornado, landslide, etc.). Dennis and I have started a neighborhood network that focuses on emergency preparedness and embraces Homeland Security’s CERT (Community Emergency Response Team). We have turned our neighborhood program into a non-profit organization, Hidden Village Partners in Preparedness, Inc., that will focus on getting every neighborhood in Cache County ready for any disaster which does include a financial disaster. Emergency preparedness handbook is available.

This will give any individual or family directions on how to prepare for food storage as well as legal documents and financial information. Our neighborhood trained together in a CERT class in 2008 and train quarterly in mock disaster situations. We had a canyon landslide a few blocks from us that buried a home and killed a family of which our CERT team engaged immediately and helped Logan City Incident Command for 5 days in this disaster. A Washington D. C. journalists called me to do a story on CERTs website “CERTs in Action” on our Hidden Village CERTs.

Sue Shaw
Home Owners Welcome, LLC.
Logan, Utah

The Best Investment I Could Make

Thanks for the invite to post a little something to your blog every once in a while. I think it’s a great idea to put up a blog on finances, sharing a group dynamic to take from each other’s ideas on what works best for them. While I am not claiming to be a financial wizard by any means, I can write on something that I KNOW works.
I’m not going to turn this into a Sunday School lesson, but I can speak to the fact that paying a tithe of 10% of my income serves as the best investment I could make, the best insurance policy I could take out, and the best savings plan I have found. Faith based teachings aside, I can attest to the fact that it makes you a better steward of your money. I am more aware of what I’m spending my money on, how much I’m saving, and where my money goes when I consider my tithing first. I know Dave Ramsey, one of the foremost financial authorities out there is one of the biggest advocates on paying your tithing first. That guy knows a thing or two about financial security. Eliminating debt, staying out of debt, and becoming financially independent, and it all starts with the first action after ever pay check and that’s the first 10%.
Tithing is something that I have always had a firm belief in. Since I was a little kid I actually used to throw extra money in my tithing jar thinking that doubling down on my tithing would help me get that bike or that cool new toy faster or make it a sure bet on Christmas. I never told my parents I was doing it, I just knew that “greasing the skids” would help me ensure the blessings I was looking for. Well, I’m not sure that helped or not, but I always got whatever I was “investing for” and I always seemed to have more money than the rest of the kids my age, even after plunking down extra into tithing. Since then I gained a better understanding and a new respect for what it’s there for. It’s not a wishing fountain. The more pennies you throw in there isn’t for wishes or bettering your luck. It’s also not that God needs my money. He could do whatever he wants, whenever he wants with or without my financial assistance. It’s for me! It’s to help me learn sacrifice, charity, and to be a better steward of what I’ve been blessed with.
I think in this new day of economic fears, unemployment at highs not seen in decades, and stock markets sitting stagnant, it’s easy to let charitable giving be the first thing to go, especially tithing. But speaking from experience, it’s never more important to keep that as the first thing you write into that budget every month. It takes a leap of faith if you are on hard times currently to put that 10%, right off the bat toward tithing. However, when you look at it as the sure bet insurance policy as I see it, the best ROI money can buy, or consider it a retirement savings account that will pay dividends you can’t fathom when it finally matures, it’s really easy to write that check!
I'll check back in occasionally with a thought or two. like I said, I'm certainly no financial guru, but I think this blog you have started is an awesome idea, so I'd love to be part of it. Looking forward to hearing some great financial advice from your other readers!

Travis Alexander
Field Human Resource Generalist, Office Max
Salt Lake City, Utah

Are You Ready For 2010

While in New York last week on a family vacation I was thinking of the upcoming year. After some careful thought we decided to create a blog for 2010 that offers advice for all kinds of ways to get ahead financially and really make 2010 a great year.

These last several years I've really learned a lot about ways you can invest, get tax breaks, accounting, insurance, and others tid bits that could help others. Then I thought... I bet my family and friends have learned a thing or to over the years also. I would love to learn from each of them as well.

This blog will be devoted to sharing what we know in our circle of influence, family and friends to become better prepared financially. (Perhaps a lot of boring stuff for our younger generation.)

We have a lot of youth in our family's that could benefit from articles, letters, and emails on how they could be better prepared then I was. Our hopes is that while we learn from each other we make 2010 a Great Year as we usher in the new decade.

January always starts off with getting ready to file your taxes. We hope to post some tips on preparing taxes, setting some financial goals, medical insurance, life insurance, retirement planning and other items that could help us pinch a penny.