Month: January 2010


GETTING ORGANIZED


The beginning of a new year is a great time to put your financial house in order! Before discarding all of your files, however, you should know what documents to hold onto and for how long …

The following are some general suggestions/guidelines about how long you should keep your personal finance records on file (Source -Bankrate.com)…

RECORD KEEPING RULES OF THUMB

Bank Records. Keep from one year to permanently. Focus particular attention on those expenses related to taxes, such as business expenses and mortgage payments.

Bills. Keep from one year to permanently. In most cases, when the payment from a bill has cleared, you can get rid of the bill. Bills for large item purchases (jewelry, appliances, cars, furniture, computers, etc.) should be kept in an insurance file for proof of their value in the event of theft/loss or damage.

Brokerage Statements. Keep until you sell the securities. You need the purchase/sales slips from your stocks or mutual funds to prove whether you have capital gains or losses at tax time.

Credit Card Receipts and Statements. Keep from 45 days to 7 years. Keep your original receipts until you get your monthly statement; toss the receipts if the two match up. Keep the statements (with tax documents) for seven years if tax-related expenses are documented.

Home Documents. Keep from 6 years to permanently. Keep all records documenting the purchase price and the cost of all permanent improvements (remodeling, additions, and installations). Keep records of expenses incurred in selling and buying the property (such as legal fees and real estate commissions) for 6 years after you sell your home. Holding onto these records is important because any improvements you make on your house, as well as expenses in selling it are added to the original purchase price to determine your cost basis. This adds up to a greater profit when you sell your house, thus lowering your potential capital gains tax.

IRA Contributions. Keep indefinitely. If you have made a nondeductible contribution, keep the records indefinitely to prove that you already paid tax on this money when the time comes to withdraw.

Paycheck Stubs. Keep for one year. When you receive your annual earnings statement (W-2 or 1099) from your employer, make sure the information matches – if it does, toss the stubs, if it doesn't, request a corrected form.

Retirement Plan Statements. Keep from one year to permanently. Keep the quarterly statements from your 401(k) or other plan statements until you receive the annual summary … if everything matches up, you can then toss the quarterly statements. Keep the annual summaries until you retire or close the account.

Tax Information. Keep returns, canceled checks/receipts, charitable contributions, mortgage interest and other information for 7 years. Why so long? The IRS has 3 years from your filing date to audit your return if it suspects good faith errors. They have 6 years to challenge your return if it thinks you underreported your gross income by 25% or more. There is no time limit if you failed to file or filed a fraudulent return.

ADDITIONAL RECORD KEEPING RESOURCES.
Recordkeeping for Individuals (IRS Pub. 552)
Record Keeping (Iowa State University Extension)

ARCHIVED TIPS (2009)


The beginning of a new year provides a great opportunity to look forward to the year ahead and identify areas for needed personal improvement; it also affords time to look back and review the financial and other missteps (growth opportunities) from the past year… As I have done in the past, I have created a topical/organized archive of tips from the past year. The links will allow you to easily review prior tips. You can also view a chronological archive of all my financial tips at the blog site or directly at:

–> 2008 Archive of Financial Tips
–> 2007 Archive of Financial Tips
–> 2006 Archive of Financial Tips

CREDIT MANAGEMENT.
Credit C.A.R.D. Reform (05.2009)
Disputing Credit Reporting Errors (01.2009)
Fair Credit Billing Act (04.2009)
First Wave of CC Changes (08.2009)
FreeCreditReport .GOV (11.2009)
Specialty Credit Reports (04.2009)
Your Credit – What are Your Rights (03.2009)

DEBT MANAGEMENT.
Debt Management Strategies (07.2009)
Fair Debt Collection Practices Act (03.2009)
Statute of Limitations on Debt (03.2009)

FINANCIAL/CONSUMER LITERACY.
Becoming Financially Fit (12.2009)
Consumer Action Handbook (07.2009)
FINRA – Advocate for Investors (09.2009)
'My Money' Resources (05.2009)

FINANCIAL PLANNING.
Consumer-Friendly Investment Company (11.2009)
Free Planning Assistance (01.2009)
Free Tax Assistance (02.2009)
Index vs. Active Fund Management (05.2009)
Mutual Funds (Prospectus into Perspective) (11.2009)
Recharacterization = IRA 'Do-Over' (01.2009)
Should You Convert (12.2009)
'Suitable' Investments (03.2009)
What is Your 401(k) Costing You (08.2009)

INSURANCE.
Creating a Home Inventory (04.2009)
Gap Insurance (06.2009)

MONEY MANAGEMENT.
$$ Information Hodge-Podge (09.2009)
2-1-1 – Locating Community Resources (09.2009)
Financial Goals (08.2009)
Flexible Spending Accounts (02.2009)
High Yield Checking (04.2009)
Is Extra Effort Worth it Financially (10.2009)
Overdraft Fees – Constancy Amidst Change (10.2009)
Rethinking Risk Tolerance (12.2009)
Should I Refinance (05.2009)
Staying Rational During an Emotional Time (02.2009)
Truth in Lending (04.2009)

OTHER.
Affinity Fraud (02.2009)
Discount Travel Resources (06.2009)
Financial Sites – My 'Faves' (10.2009)

STUDENT RESOURCES.
Consolidating Private Student Loans (07.2009)
Income-Based Repayment and Loan Forgiveness (06.2009)
July 1 – Scheduled Student Loan Changes (06.2009)

FREE FINANCIAL PLANNING ASSISTANCE IN 2010




“JUMP-START YOUR RETIREMENT PLAN”

FREE FINANCIAL PLANNING ASSISTANCE

Kiplinger's Personal Finance & NAPFA

(FRIDAY, JANUARY 22 & TUESDAY, JANUARY 26)

For the ninth year, Kiplinger’s Personal Finance Magazine is working with the NAPFA (National Association of Personal Financial Advisors) Consumer Education Foundation to provide free, objective financial planning advice for consumers. The beginning of the New Year is a great time to get a financial checkup.

NAPFA (http://napfa.org) is the leading professional organization for fee-only financial advisors. Regardless of your current stage of life, this is a great opportunity to jumpstart your financial plan (and follow through on your New Years resolution!) and address questions you may have about retirement savings, estate planning, taxes, insurance, college savings, etc. Last year, thousands of people received assistance. Typically, fee-only planners charge an hourly rate of $150 to $300.

Make sure you have relevant documents on hand to make the most of your time. If your question(s) are too complex to be addressed on the spot, you may be directed to the NAPFA site to find a planner in your area. A planner can aid you in making rational [rather than emotional] financial decisions. The services are available to anyone.

Where do you go to obtain the free assistance?

*CALL – 888-919-2345

*ONLINEhttp://www.kiplinger.com/links/jumpstart

Dr. Mark Oleson




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