All posts by Vanessa

Tax tip – file something!

bald-eagle-and-a-flag web
http://www.publicdomainpictures.net/view-image.php?image=47412&picture=bald-eagle-and-a-flag

Tax Day in 2016 is April 18th which means you’ll need to e-file or postmark your taxes or an extension by that date.   Since that’s just 2 days away, I wanted to share with you a quick tip I read in last week’s Parade magazine:

Even if you owe taxes and don’t send money, you’ll save big if you file your return or an extension by April 18.  Why?  The failure-to-file penalty can be 10 times more than the failure-to-pay penalty, which is .5% + interest.  (http://parade.com/468729/alison-abbey/still-havent-filed-these-tax-tips-can-help/)

One important note: filing an extension isn’t an extension on tax payments – the IRS still wants you to pay an estimate of your taxes owed by April 18, 2016.  For more information on how to file an extension, check out this page on the IRS website: https://www.irs.gov/uac/Newsroom/Five-Things-to-Know-if-You-Need-More-Time-to-File-Your-Taxes.

So if you haven’t finished your 2015 taxes yet, make sure you file something (your return or an extension) by Monday – you’ll save yourself a headache by doing so!

Happy Decoding!

Fun fact for today: Washington DC is celebrating Emancipation Day (the day President Lincoln signed the bill ending slavery in DC), which is April 16th, on April 15th in 2016, since the 16th is a Saturday.  As a result, Tax Day has been moved to April 18th.  So you get 3 extra days to file your taxes this year – yippee! 😉 (Source: https://www.libertytax.com/tax-lounge/tax-day-will-come-3-days-later-in-2016/)

Disclaimer: This blog post is not intended to be tax advice.  For answers to your specific tax questions, please consult a tax professional.

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Tax tip – read the instructions!

Pile of coins

Copyright 2016 Sweet Doll Designs

I know by writing this post, I will be revealing myself as a major dorko, but here goes, anyway 😉

While Accounting is my profession, I am not, nor do I ever have the desire to be, a tax accountant.  Having said that, I always prepare my taxes by hand, check my work on Turbo Tax, then I file my tax return through the mail.  I do this partly so that I fully understand how my taxes are being calculated and partly because I don’t want to pay Turbo Tax to file my returns for me.

Over the years of filling out my 1040 form myself, I’ve discovered that the IRS includes really helpful line-by-line information in the form’s accompanying instructions.  With that in mind, here’s my big tax tip that will only take a few minutes, but has the potential to save you money:

Read the 1040 form instructions!

Specifically the section on Adjusted Gross Income, which can be found if you scroll down to page 31 of this pdf document: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf.  Dorko alert: I read through each of these potential deductions carefully to see if I qualify for any of them.  By doing so, I found that I qualified for one – you may be pleasantly surprised that you do, too!

There are only 13 possible deductions in this section, so it won’t take you long to read the instructions.  Examples of popular deductions are: student loan interest, tuition and fees, IRA, HSA, moving expenses, and alimony paid, to name a few.

It is also worth your time to read the Tax and Credits section found on page 38 of the same pdf document: https://www.irs.gov/pub/irs-pdf/i1040gi.pdf.  There are only 7 credits to read about, so again, it won’t take much time.  In this section are credits such as: retirement savings contributions credit, residential energy credit, child tax credit, and education credits, to name a few.

I have always found that reading the IRS-provided instructions while filling out my taxes has been very helpful and well worth my time.  Also, if I have any questions when reading the instructions or am not familiar with a referenced form, I just quickly look it up on the IRS website.  I know it may seem scary, but the IRS website is really very easy to use and understand, helpful, and informative!

Good luck with your tax returns this year!  Remember to file by April 18, 2016.

Happy Decoding!

Fun fact for today: Have you ever wondered what the difference is between a tax deduction and a tax credit?  A deduction is taken before calculating your Adjusted Gross Income (otherwise known as your AGI).  Your taxes are calculated on your AGI less the itemized or standard deduction and less your exemptions.  On the other hand, credit provides a dollar-for-dollar reduction of your tax due, since any credits are subtracted from the tax amount due.  A deduction isn’t better than a credit and vice versa, but it’s important to be sure you claim all available deductions and credits if you qualify for them! (Source: https://www.irs.com/articles/tax-credits-vs-tax-deductions)

Disclaimer: This blog post is not intended to be tax advice.  For answers to your specific tax questions, please consult a tax professional.

Car Tips: Buying a Car? Do Your Homework!

Left – Ruby Sparkler and right – Shirley Temple Copyright 2015 – Sweet Doll Designs
Left – Ruby Sparkler and right – Shirley Temple
Copyright 2015 – Sweet Doll Designs

So you want to buy a new car.  It’s an exciting and daunting task!  I was reminded of that when I bought a car last weekend.  Not only is the actual car buying process in the dealership a long one, but the research it takes to get to that point is long and involved as well.  However, a well-researched purchase will make you happy for years to come.

Here are a few car buying tips to help you get on your way:

  1. Decide what type of car you’re interested in buying. By that I mean to ask yourself – do you want to buy a sports car, a small car, small SUV, regular SUV, truck, motorcycle, moped…you get the idea.
  2. Once you’ve decided on the size car you want to buy, look at the makes and models in that particular class. Do you like the look of any specific one?  Try to narrow down your search to just the few that you’re interested in investigating.
  3. Not to be forgotten is your budget! You probably have an idea of how much you can afford to pay for a car payment each month.  Go online to a site like bankrate.com to get a rough estimate of how much that means you’d be able to afford to finance.  That will tell you the top price you can pay for a car.  Then it’s up to you to determine if you have enough in savings to put a down payment on the car.  Also remember your current car that you may consider trading in – check out what a fair price may be for the trade-in value on Kelly Blue Book.
  4. Purchase a membership to Consumer Reports. It costs $30 a year and it will be well worth the money.  Once you’re a member, you can research the reliability, satisfaction, and safety ratings of the cars you’re investigating.  If you’re buying a used car, pay particular attention to the reliability ratings of each model year – you may find there are certain model years that you should avoid.
  5. Search for the car model and year in Edmunds.com to see what a fair price to pay is for that particular car.
  6. Make a note of all the features you’re looking for in a car. You may not find a car with all those features, but if will be a good starting point.
  7. Now you’re ready to start looking for available vehicles to test drive. You can find available cars by searching local dealership websites, checking cars.com, searching Consumer Reports online, and searching Edmunds.com, to name a few. Look at the mileage on each car, year, and color.  Investigate each listing to determine if you’re interested in the car.
  8. Have fun test driving the cars you’ve found! After you’ve test driven a few, you’ll be able to decide which model you like best.
  9. When you go to the dealership, know your budget and stick to it! They are great at trying to upsell you on features you don’t need.  Stand firm in your budget and know the fair price that you should pay for the car and insist you get it!
  10. It’s helpful if you don’t fall in love with any of the cars you’re interested in – your greatest negotiation tool is being able to walk away.

This process can be overwhelming, especially in the dealership.  Consider bringing a friend who can help keep you on track with your budget or any other aspect you feel may be helpful.  And most of all, enjoy your new car!

Optional: Come up with a fun name for your car.  Here are the names of my cars so far: The Beast, Black Beauty, Esmerelda, Shirley Temple, and Ruby Sparkler! 🙂

Happy Decoding!

Fun fact for today: An estimated 16.9 million cars were sold in the US in 2014! (Source: http://www.nytimes.com/2015/01/06/business/us-auto-sales-jump-for-2014.html)

Happy Halloween!

Winner of the pumpkin carving contest at my work! Copyright 2015 - Sweet Doll Designs
Winner of the pumpkin carving contest at my work!
Copyright 2015 – Sweet Doll Designs

As you go off on your Halloween adventure with your witches, goblins, ghosts, and ghouls, stop and reflect on past Halloweens.  Do you have a favorite costume?  Was it purchased at the store or did you toil for hours to make it?  Do you have any memories of money traditions around Halloween?

I was all sorts of things for Halloween growing up: bunny, pumpkin, panda, space cat, Frankenstein, witch, one half of a pair of dice, math wizard, the universe, sailor, Boo from Monster’s Inc., cat burglar, and a 20’s flapper, to name a few.  My costumes were always homemade.  It was always so fun to plan out all the elements needed for each costume!

My childhood neighborhood was nearby a bunch of other neighborhoods, so my candy haul was always pretty significant.  And of course you know where to find the best candy.  Some houses gave away the king size candy bars (like mine!) and some gave away the “fun” size (though whoever thought that size was fun was crazy).  Then there were the people who handed out healthy “treats” like raisins and apples.  But there was one guy who always saved his pocket change and came to the door with a huge bowl full of change and a small spoon.  Probably not surprisingly, I loved this house because it gave me more pennies and nickels to roll with the rest of my change!

Share your fun Halloween memories in the comments below.  Have fun and be safe this Halloween!

Happy Decoding!

Fun fact for today: Total Halloween spending (costumes, decorations, candy, cards, etc.) is expected to reach $6.9 billion in America for 2015! (Source: https://nrf.com/media/press-releases/nrf-157-million-americans-will-celebrate-halloween-this-year)

Retirement – IRA contribution limits

Lake Anne, Reston, VA Copyright 2015 - Sweet Doll Designs
Lake Anne, Reston, VA
Copyright 2015 – Sweet Doll Designs

Last weekend, I was at a friend’s house for dinner and we started talking about saving for retirement.  We were discussing the different types of plans we use for our personal retirement savings – 401k, 403b, IRA, and Roth IRA.  We knew there were contribution limits for each retirement tool, but we weren’t sure about retirement limits among similar tools.  Our question was: can we contribute the maximum amount to a traditional IRA plus the maximum amount to a Roth IRA?

I decided to answer this burning question so I looked it up on the IRS website!

According to the IRS, the contribution limit for IRAs in 2015 is $5,500.  It is important to note that this is the limit for most people, but if you are age 50 and over, you are able to contribute more to your retirement account (to determine how much more, consult the IRS website – https://www.irs.gov/Retirement-Plans/COLA-Increases-for-Dollar-Limitations-on-Benefits-and-Contributions).

The IRS website clearly states that you may contribute a total of $5,500 to all your IRA accounts, regardless of if you’re contributing to just one IRA, several IRAs, or a traditional IRA and a Roth IRA (https://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits).  So, no, you can’t contribute the maximum amount to a traditional IRA plus the maximum amount to a Roth IRA.

That settles that question! 🙂

Happy Decoding!

Fun fact for today: Most people think IRA stands for “Individual Retirement Account”.  However, that’s not actually the case.  IRA stands for “Individual Retirement Arrangement”.  Exciting stuff, huh? 😉 (Source: https://www.irahelp.com/slottreport/what-does-ira-stand-not-what-you-may-think)

Author’s note: There are many different kinds of retirement plans for different circumstances.  You can learn more about them here: https://www.irs.gov/Retirement-Plans/Plan-Sponsor/Types-of-Retirement-Plans-1.  

Disclaimer: This post is not intended to be retirement or financial advice.  Please consult your tax professional regarding your specific circumstances before making any changes to your retirement and other accounts.

Twists and Turns – My Journey

Copyright 2015 – Sweet Doll Designs
Copyright 2015 – Sweet Doll Designs

I read a wonderful article today by Kate Northrop.  It’s all about how life might not turn out the way you expect.  I could identify with life throwing some twists and turns my way.  Read the article and see if it rings true for you, too: http://www.katenorthrup.com/its-not-going-to-turn-out-the-way-you-thought/

I especially love the hopeful ending to the article, suggesting that anything is possible if you keep putting one foot in front of the other toward your dreams.  Even though it may seem scary, go ahead and follow life’s twists and turns.  This new direction may not have been in your 29 point life plan, but that doesn’t make it a bad thing.  It could be a completely awesome thing!

Dare to dream, my friends, and enjoy the ride! =)

In the spirit of this article, I thought it might be interesting to share with you how I began writing these posts.  See if you can spot the twists and turns.

I studied at Colgate University and earned my BA in Astrogeophysics with a minor in Geology.  While I was in school, I thought I wanted to be a planetary volcanologist.  But once I graduated, I thought – holy cow, what do I do now?!  I didn’t want to be a professor, I didn’t want to work out in the field, and I didn’t want to work in the lab.  Where did that leave me?  I knew I would need further education, but since I wasn’t clear on my life’s direction, I elected to take some time off to decide what to do.

I stayed at Colgate for six months after I graduated to work full time as the gallery assistant in the art gallery on campus.  I enjoyed that so much that I considered museum studies, but decided that wasn’t quite right, so I kept searching.  A friend from college told me she needed a roommate and asked me if I’d consider moving.  So I picked up and took off for a city six hours from where I grew up where I knew no one and, after interviewing for all sorts of jobs (including one as a ballroom dance instructor), I got a summer internship at the American Association of Museums and a part time job as a bookkeeper.

After that summer, I went full time at my bookkeeping job and I realized I really liked it.  It may seem like a stretch from my degree, but if you think about it, math was a big part of my undergraduate studies and math is a big part of the finance world, too.

I eventually changed companies and met an amazing boss.  She recognized my talent, but told me that if I wanted to get anywhere in the field, I would need to get a degree, and probably even earn my CPA.  Since I did very much enjoy working with numbers, I took her advice to heart and enrolled in evening classes at University of Virginia.  After four years, I earned my Accounting degree.  Now I’m studying for my CPA.

Along the way, I interviewed at a company where I really wanted to work.  I had done a bunch of research before the interview and found they had a financial literacy program.  I had never heard of financial literacy, but it sounded interesting.  I mentioned it in my interview, only to find out that they were phasing out the program.

I didn’t get that job and it broke my heart at the time.  However, that one idea lit a fire inside me – a passion for financial literacy.  I dream of one day teaching kids of all ages about financial literacy.  I want to help the next generation start off on the right foot, financially speaking.

This blog is my first step toward achieving that dream!  I’d like to take this moment and thank each of you for reading my blog and for all your support.  It means so much to me and helps keep me going.

I hope you enjoy Kate’s article and my own personal journey of how the twists and turns in my own life brought this blog post to your computer, tablet, phone…or maybe even your watch?!

Remember, dare to dream and enjoy the twists and turns that make the ride better than you imagined!

I’d love to hear about some of your life twists and turns in the comments below!

Happy Decoding!

Fun fact for today: All 50 states are listed above the Lincoln Memorial on the back of a $5 bill (Source: http://www.cracked.com/photoplasty_498_23-mind-blowing-true-facts-about-money_p3/)

Author’s note: This post is dedicated in loving memory of my Grandpa, Stan (January 26, 1927 – October 18, 2014).  He was one of my biggest supporters.  He was kind, funny, smart, and a great listener.  He had an incredible interest in life and would talk to me for hours about my experiences and adventures and share his own.  He gave amazing advice and even better hugs.  On a particularly beautiful day, he would remark at the wonderful show Mother Nature was putting on for us.  He encouraged me to always seek learning opportunities, maintain an awe and wonder in the world around me, talk to people everywhere I go, and have fun!  He was graceful, distinguished, and thoughtful.  He was proud of his wife, my Nanny, for her financial skills which she passed along to her children and me.  He was my dance partner at many family weddings, thankfully also including my own.  He was all the things that make up a perfect Grandpa and more.  I am so grateful to have had this much time with him on this Earth.  I love you bunches, Grandpa! xoxo

Dancing with Grandpa at my wedding Photo credit: Axente Productions Copyright 2015 – Sweet Doll Designs
Dancing with Grandpa at my wedding
Photo credit: Axente Productions
Copyright 2015 – Sweet Doll Designs

Changing Your Routine

Copyright 2015 – Sweet Doll Designs
Copyright 2015 – Sweet Doll Designs

I am not a huge fan of change.  I’ll wager a guess that most people share my sentiments.  But, as they say, the only constant in life is change…so I guess we’ll have to get used to it!

As I mentioned in a recent post, I had to find a new job a few months ago.  The process was scary, exhausting, exciting, and ultimately, rewarding since I love my new job!  One thing that I didn’t consider until after my first full month of working at my new job was that I’d also have to change my routine when it came to paying my bills.

For nearly 10 years, I was used to receiving my paycheck on the 10th and the 26th of the month.  At my new job, I get paid on the 15th and the 30th/31st of the month.  At first, this may seem like no big deal.  However, I took a while to think about how to organize my bill paying routine going forward so that I could make sure I was paying my bills on time each month.

In the past, I paid bills on the 10th and the 26th.  That seemed to work out with the due dates of my bills.  Even though I get paid about 5 days later than I used to, the new schedule really doesn’t jive with my bill due dates.  From what I could tell, I had three options:

  1. Stop paying bills – who needs them, anyway?!
  2. Call my providers and request new due dates for my bills
  3. Change my well-established bill paying routine and – gasp – come up with a new one!

We’d all love the first option, but being realistic, I struck that one off my list.  While the second option was a valid one, it felt like too much work.  That left me with option #3 and I thought I could be brave and make a change, and that’s just what I did.

Now I sit down at the beginning of the month and write all my checks and schedule all my bill payments.  I know how much money to expect will arrive in each paycheck and by the beginning of the month, I know how much I will spend on bills and savings that month.  I can also be sure that I leave enough money in my checking account to pay the rent due on the 1st of the following month.  If I’ve written a check, I will put a reminder in my phone calendar to mail the check on a certain date so that it will arrive at the provider by the due date.

So far, organizing my bill paying at the beginning of each month is working out well for me.  It gives me a feeling of control over my finances and peace of mind that I won’t miss any due dates.

Have you come across an instance where you’ve had to make an unanticipated change with organizing your finances?  Post in the comments below!

Happy Decoding!

Fun fact for today: The current design of the penny with Lincoln’s face on it has been in circulation since 1909.  Previous penny designs featured Lady Liberty on the front of the coin.  (Source: http://www.ehow.com/about_5278127_lincoln-penny.html)