5 End of The Year Tax Tips

Now is the time to save on taxes before the end of the year. Owe, just right, or refund. That’s the game for taxes. We would like for it to be just right (own nothing and receive nothing). However, most of us fall into the owe the government or refund from the government groups. With the tax rules for benefits and deductions changing almost every year, it can be hard to keep up and get it just right. Well, there are some common ones that haven’t changed. Yes you have until April to file taxes; however, there are steps you can take now to put more money towards your financial goals and save on taxes.

1) Increase contributions to retirement accounts.

Try to max out your tax-deferred retirement accounts before the end of the year. If you’re employed this will likely be a 401(k) or equivalent account. The maximum contribution is $18,000 or $24,000 if you’re over 50 years old. If you can’t max out you contribution, at least contribute enough to receive your employee match if offered by your company. Not sure if you have an employee match or how much it is? Contact your benefits office or HR.

You can also contribute to your Traditional IRA (individual retirement account). Contributions made to your Traditional IRA are not taxed. However, you will pay taxes on withdrawals. You can get a tax break now and allow the money to grow tax-free. Once it’s time to withdraw hopefully, you’ll be in a lower tax bracket and won’t have to pay as much taxes on the withdrawal of your money.

If you’re self-employed, outside of an IRA you may also have a solo 401(k). You can contribute 20% of your income up to $53,000. You can make tax-deferred contributions up until your business files taxes.

2) Withdraw distributions from a traditional IRA.

According to the IRS, when you’re over 70.5 years old, if you don’t distribute at least the minimum required amount then you’ll be punished with a 50% penalty on the amount you should have withdrawn. Yep, the government can take half of the minimum required distribution (RMD) if you don’t take it out. If you are the beneficiary of an IRA you also have to take out the RMD.

3) Delay the bonus.

If your company provides an end of the year bonus, see if you can delay it until after December 31st. The bonus will then apply to the following year, saving you on taxes this year. If you know you’ll be in the same or a lower tax bracket next year this is a great method to save on taxes.

4) Delay receipt of invoices.

As an entrepreneur, you can change the due date of your invoices to the following year. Income not received this year cannot be included in this year’s taxes. Delaying receipt of payments can save you money for this tax year. Again use this trick if you know you’ll be in the same or a lower tax bracket next year.

5) Donate to charity.

Donating to charity is another great way to decrease your tax burden for the year. If you haven’t made your charitable contributions, get them in by December 31st. Be sure to get a receipt of acknowledgement for the donation that shows the monetary value of the donation. If your donation is greater than $250 then you definitely need that receipt. However, if your donation is less you can also use your bank statement or credit card receipt as proof.

Tip for businesses:

Tax benefits can expire and unless you have your pulse on it you won’t know which benefits are expiring. If you have a business talk to a tax professional so that you make sure you take advantage of all the tax benefits for which you’re eligible.

Photo credit: Elvert Barnes

About Dr. Maria James

Dr. James, The Money Scientist, has expertise with designing income management, debt management, and wealth strategies to help you live your best life. She is the founder of Pocket of Money, LLC and the creator of The Wealth Protocol™. Dr. James has also been a guest financial expert on ESSENCE, WEAA, Madame Noire and more.

Your Number One Money Blocker

*As Seen On http://pocketofmoney.com/your-number-one-money-blocker/

Want to know the real reason why you aren’t earning the salary you want? Want to know why every time you make some money it goes out just as quickly? Do you wonder why you can’t move to a higher income bracket?

The reason for all of these issues is your money story. It’s your relationship with money. A money story based on lack and limitation will play out in your life repeatedly. Whether you realize it or not, you have an unhealthy relationship with money. This is especially true if you feel anxious or stressed out when you pay your bills.

Take a moment to observe your money relationship. Do you have a love/hate relationship with money? What emotions come up for you when you think about money? Are they positive or negative? How does your body respond? All of the negative reactions are proof that your money story is blocking your prosperity. Just like you, money doesn’t like to be where it’s not wanted and appreciated.

Don’t beat yourself up. It’s not your fault. You were totally unaware of the impact your money story has had on your life. It’s very important that you don’t attach any blame, guilt, anger, or shame to your financial situation. It’s just that – a situation. It doesn’t define you or determine your worth as a human being.

Money is simply an energetic number. The negative energy generated from your money story is transferred to your bank account. Your money story is a melting pot of your parent’s beliefs, societal standards of status, spiritual teachings, and your own personal experiences. The good news is that you can create a new money story for yourself starting right now.

In order to usher in prosperity you have to first become aware of your current money story. Pay attention to how you speak about money. Become aware of the fears you have about losing money or not having enough money. Notice the meaning you attach to money. For example, you may think being poor is more honorable than being rich. Don’t judge what comes up, just let it be. Be an impartial observer.

Second, reflect on where you first heard these ideas about money. Who told you money didn’t grow on trees? Were you told that money is the root of all evil? Did you have a bad experience with a wealthy person? Try to pinpoint when you began receiving these messages about money. Again, do not assign any blame. The people involved were simply repeating what they were taught.

Next, forgive yourself and everyone that contributed to your unhealthy money beliefs. Forgiveness will free you from the past. It’s not necessary to actually tell the person that you forgive them. Forgiveness is felt in the heart. Depending on how intense the emotions are you may have to forgive the same person several times. You’ll know that you’ve forgiven them when you can think of the incident without being pulled back in emotionally.

Finally, you’re ready to create a new money story. The old story and negative emotions must be replaced. Here’s how:
• Focus on feelings of gratitude when you think of and spend money.
• Read the cashier’s name tag and celebrate the fact that you can help him/her to feed their family.
• Make a list of all the amazing things money allows you to do.
• Create new beliefs that are aligned with your values instead of your fears. Like, my relationships strengthen as I earn more money.

Your original money story wasn’t created overnight. It will take consistent effort and awareness to create a new one. Notice the abundance that appears as you do. This may come in the form of money, ideas, opportunities, or support from others. Appreciate however it shows up. Remember, the more you have, then the more you can give to others. You’ll always get back what you give.

Your turn! Comment below and share your new money story.

HWHNHWHNHWHNHWHNHWHNHWHNHWHNHWHNHWHNHWHNHWHN

Sarah Aderson, also known as the Leg-a-SHE Strategist, is an international speaker, best selling author, and product creator.  As the founder of Expand Your Heart, she transforms your services into digital and physical products.  Sarah empowers entrepreneurs to charge what they’re worth so they can leave a lasting legacy.

Sarah’s transformational product line is designed to help purposeful entrepreneurs de-stress, envision their dreams, and boldly declare their desires. She has a flair for packaging your passion into profits. Sarah shows you how to build an empire, not just a business. Get your free 2 Hour Product Creation course at www.expandyourheart.org

Photo credit: TaxRebate.org.uk

The Major Mistake You’re Making with Personal and Business Money

If you have a business or a side hustle you want to turn into a business, then let’s talk about a major money mistake that happens often and how to avoid it. Revenue from a business is a great way to rake in more income or the path to living life on your own terms. Perhaps you’re selling a product or offering services. It’s been hard work, many sleepless nights, and skipped outing with friends, but now you’re bringing in revenue. Great! Here is where many start to make this major yet common mistake with their money.

Whether you started the business to supplement income from your primary job or you’re full-time working your business, you may be using some money from your personal account to purchase things for the business and using business funds to handle personal expenses. You’re likely using personal money or income to fund the business anyway right, especially as a new entrepreneur. You’re the first investor. I know I was my first investor. I started my business with personal savings, but I avoided a major mistake when doing this and I want you to avoid it too or correct it if you’re already doing it.The major mistake is mixing your personal money with your business money. Here is why this is a big mistake and can cost you money later.

1) You can’t show positive cash flow. If you’re consistently mixing your personal funds with your business income to make business and personal purchases, it’s hard to show positive cash flow into your business. You won’t be able to properly assess the health of your business and adjust your strategy to ensure continuous revenue and growth. This looks very sloppy and high risk to investors, so they’ll want no part of it. You have to be able to see exactly how much revenue is coming in and the amount of expenses the business has. You should know the exact dollar amount of how much it takes to run your business every month. Are you making that? What’s your profit margin? Will you have enough floater money for your slow months?

2) You’ll pay more in taxes. The IRS will think you have a hobby not a business that means money lost as they deny legitimate deductions. They will only allow deductions if you can clearly show that the expenses were for business. You don’t want the nightmare at tax time of sorting through old receipts and combing through bank statements trying to determine if something was a real business or a personal expense. Definitely not.

How to AVOID this:
1) Have separate bank accounts. You should have separate savings and checking accounts for your business. Only use the business account for business expenses and only use your personal account for personal expenses. It looks more professional, you will look like a real business owner if the business name is on the check or debit card. The money can be clearly tracked and the IRS is less likely to audit you or deny deductions. One of the first things I did after officially filing my paperwork was to go to a bank and start a business checking account. I felt so official once I got the debit card. I kept looking at my business name on it and smiling.

2) Pay yourself a salary. If you’re thinking but the whole reason I started this business is to supplement my income, no worries. You will be cutting yourself a check like an employee. You own the business so simply write yourself a check or transfer the money from your business checking account to your personal checking account. Start off with however much you need $25, $300, $3,000. Just be sure not to go overboard. Leave funds in the business to cover operating costs at minimum.

3) Create separate budgets.  Design a personal budget that is completely separate from your business budget. Of course include your salary line item and if you give funds to your business every month include a business line item as well. Also, account for the salary and income in your business budget. Budgets will help you see what your operating costs are for the business and operating costs for your household. You can then make sure those aforementioned line items make sense.

4) Use separate tracking software. You know I’m a big proponent of tracking your money. Track your personal and business income and spending, just don’t use the same account or system. You can use something like Excel and have separate files and folders for the business vs. personal funds. Or use accounting software such as Mint or Quicken for personal and Quickbooks or Xero for business funds. I like Mint for personal and Quickbooks for business.

About Dr. Maria James
Dr. James, The Money Scientist, has expertise with designing income management, debt management, and wealth strategies to help you live your best life. She is the founder of Pocket of Money, LLC and the creator of The Wealth Protocol™. Dr. James has also been a guest financial expert on ESSENCE, WEAA, Madame Noire and more. Connect with Dr. James in Baltimore, MD at the Unlimited You Weekend, April 10-12, 2015. Visit www.unlimitedactions.com for more details.

10 Ways to Make Yourself Save More Money

Saving money can be difficult as you’re usually putting money away for an intangible item, out of sight out of mind problem, for a future occurrence that may never happen. Maybe you make a general statement such as I’m going to start saving because it’s important. This is not motivating enough to consistently save money. You may save for a week or two, but then you’re going to fall off.  Ask yourself: Why is it important? What exactly are you saving the money to buy? Here are a few more ways to make you save more money.

1) Write down your goals (previous post about resolutions and goal setting). In order to achieve something you first have to state what it is. The goal should also be specific and measurably. You should know exactly when you have successfully reached the goal, give it a dollar amount and deadline.

2) Create a visual reminder of your goals. Out of sight, out of mind is a big factor. You’re more likely to spend and not save if you can’t remember why you should be saving, especially when the impulse to buy a want occurs. Create something visual to hang on your wall, place as a screen saver, etc.

3) Break your savings goals into daily or weekly amounts to make it more manageable in your mind and so you know exactly what to aim for every day or week. For example if you want to save $6,000 for the year, then you know you need to save $500 each month, $125 each week, or $17.85 each day. If you’re saving up $1,000 for a trip coming up in 5 months, then you know you need to save $200 each month, $50 each week, or $7.14 each day.

4) Wait and come back. When you want to buy an item, wait for at least a week, come up with reasons as to why you need it, not want but need it. If you can’t think of any reasons then leave it. If the item will no longer be available in a week, then wait at least 24 hours. You’ll be amazed how this simple trick will get you to decrease unnecessary spending.

5) Shop your closets. I don’t know about you, but sometimes when I clean a closet or cupboard I find things that I’d completely forgotten existed. There may be things in your home suffering the same fate. What’s in the back of your closet? Check the clothes closet, hall closet, pantry etc. What forgotten items may be in there? How can you re-purpose them for the new season or a new use?

6) Get a bottle for loose change. When you buy something, put the loose change in a bottle (aka piggy bank for adults), or just get a piggy bank and have fun with it. Once your bottle is filled, wrap the coins in the appropriate wrappers and take them to the bank. It’s better to take them to a bank where you have an account as you can deposit the money in savings right then and there.

7) Only charge items you can pay off in full before the end of the month. Don’t carry a balance on your credit card and you’ll save all the money you would have paid in savings. You’ll also maintain a good credit card history and credit score while not increasing your debt.

8) Make a realistic not extremely frugal budget. One of the top reasons a person doesn’t stick to a budget is the budget isn’t realistic. The budget is so limiting, there are no rewards or real entertainment factored into it. No one and I mean no one can stick to a budget like that one and if you can’t stick to the budget then you’ll overspend. Make sure the budget is frugal so you’re getting the most out of your money and moving towards your financial goals, but don’t make it so restrictive that you can’t enjoy yourself a bit. You won’t overspend and you’ll save money.

9) Calculate how long you have to work to afford the item. Every item you buy you can figure out how much time you have to work to be able to afford it. For example, if you’re buying a jacket that is $200 and you make $20 per hour, you worked for 10 hours in order to get the money to purchase the jacket. Is it really worth 10 hours of work? Do you feel comfortable trading 10 hours of your time for the jacket? Do this before making a purchase and you might just decide the item isn’t worth it.

10) Delete your saved card information on the shopping sites. Major shopping sites will allow you to create an account and save your payment information. This is offered as a gesture in convenience for the shopper. If you have an account you don’t have to take out your card and spend time entering the information. Or looking at it from their view, you won’t spend time thinking about the purchase and potentially deciding that you really don’t need the item. Convenience can and does lead to more spending. Delete the information, take the time and save more money.

What are your biggest obstacles to saving money and how do you overcome them?

Want to learn more about creating your own wealth check out Financial Blueprint for Quitting Corporate.

About the Author: Maria James has a compassion for people that makes her involvement in Heal a Woman to Heal a Nation a sure fit. She is a biomedical scientist who is public health conscience and has always worked for the betterment of others. Maria is the founder of Pocket of Money, LLC which provides tools and tips to help you take control of your money and live your best life. Dr. James is our resident Money Scientist.

10 Actions Needed for Financial Freedom

The terms financial freedom and financial independence generally refer to the same concept or ideal. However, individuals consider them to mean different things. For some they mean debt free, having the ability to live without working to earn income, or being financially secure and not stressing about money. Whatever your definition of financial freedom, there are some key actions that you should take to get you on the right path to achieving it. 

1) Calculate your net worth
Your net worth is a snapshot of your financial health at a specific point in time, your wealth status if you will. Understanding where you currently stand financially will help you in defining realistic goals. Use the formula net worth = assets - liabilities. You need a baseline to work from as you move toward financial freedom. Calculating your net worth at the start will provide that for you.

2) Define and write down your goals
You need to know the goal in order to achieve it. In other words you can't hit the target if you don't know where it is. Take some time to reflect on where you are currently with money and where you would like to go. Define your goals so you can accurately determine the steps needed to reach them. Some common goals are saving an emergency fund, saving for retirement, saving for a yearly vacation, adding to an investment portfolio.

3) Design a money strategy
A money strategy is a comprehensive plan to detail what you plan to do with your money. This is the action plan to achieve your goals. For each goal detail the steps needed to achieve it, resources you'll use and how much money is involved in each step.

4) Create a monthly and annual spending plan
You need to create a spending plan to determine where your money is going. You should have a clear view of how much you will spend in what categories and how much you will save. This allows you to see where you can cut costs and free up money aka keeping more money in your pocket. Creating an annual spending plan will allow you to also see big picture and determine how much of your money is truly going to certain items. You may decide to skip that Starbucks latte or forgo certain subscriptions after all. The money you free up and save can then be put towards a few luxuries and income generating assets!

5) Create a specific debt reduction strategy
If you still have debt, you need to pay it off to be able to use the full potential of your income. You can't reach financial freedom if you have debt holding you back. Work on paying your debt down, "good" and "bad" debt must go. Debt is debt and you'll save yourself thousands of dollars by getting rid of it. Make a specific plan of what order you'll target the debt accounts. Aggressively pay down one at a time to make the most impact and not spread the money too thin.

6) Freeze your credit cards
Now that you have a plan to eliminate your debt, dont rack up anymore. Put the credit cards away and make them very difficult to use. Literally putting the cards in the freezer is a great way. Take the cards out of your wallet and leave them at home. Spending within your means is a must for financial freedom.

7) Open a separate savings account
You need one savings account for your emergency fund. As indicated by the name you don't touch this money unless it's a true emergency. Did you know you should also have another savings account? This is a small account to house money for non-emergency expenses that are in your spending plan, but may not be used every month. If you leave the money in your checking account it's likely to be spent.

8) Cut costs not quality
When you create your spending plan, you'll see places where you can cut back. However, cutting back to lower expenses doesn't mean sacrificing quality. Think of ways to get equivalent products or services for less e.g. shift providers, eliminate things you don't use, find coupons and deals etc. You don't want to feel deprived, but you want to plug money leaks and free up as much money as possible that can be used for saving and investing.

9) Create side income as needed
You've streamlined your expenses, but may still need a little more money. Whether you just want more money to invest or enjoy luxuries or you need more money to make ends meet, having side income is beneficial. This is income outside of your main income source. Some examples are part-time jobs, freelance work, etc. (check out 23 Ways to Make Money).

10) Open a 401(k) and traditional IRA
We know saving is only part of the journey to wealth. Putting your money to work for you is also necessary to reach your goals. At bare minimum open these two accounts. If you work for an employer, make sure to speak with HR (human services) about reanalyzing or starting a retirement account. In most cases this will be a 401(k) or 403(b). If you started one a while ago make sure you check how much money is going towards it and how you can increase the amount. You should also open a second retirement account, an IRA. You can only add so much to your 401(k) so when you hit that maximum you want to still be able to save. The IRA will allow you to do so.

About the author: Maria James has a compassion for people that makes her involvement in Heal a Woman to Heal a Nation a sure fit. She is a biomedical scientist who is public health conscience and has always worked for the betterment of others. Maria is the founder of Pocket of Money, LLC which provides tools and tips to help you take control of your money and live your best life. Dr. James is our resident Money Scientist.

Why New Year's Resolutions are Dangerous to your Money

Many people look at new year's resolutions as a good thing. They make vows to get healthy, save more money, spend less money, give up vices or bad habits and more. Do these all sound great to you? Most people would say yes. However, all of the above are bad resolutions. Why do you ask? Because they are all too vague! What exactly is meant by get healthy? Are you resolved to eat healthier? How? What exactly is meant by save more money? How are you going to do it? How much is more? You have to create a specific plan if you want to achieve these goals. Making vague resolutions is setting yourself up for failure. Do these three steps to make concrete financial resolutions or goals.

1) Write a plan.
Write out what your resolution is. That's the what. Then get very specific as to how you are going to achieve it. What the steps necessary to achieve this goal. For example, say your resolution is to start saving for retirement. Look up what that entails. What is the first step? You need to know about different types of retirement accounts such as 401(k), 403(b) traditional IRA vs Roth IRA, SEP IRA for those who are self-employed. Learn the advantages and disadvantages, money going into the account pre-tax vs contributing after paying taxes on your income. I would go into the differences but that's is an entire blog article itself. Then write out how to start the steps to start these accounts. How much you're allowed to put in etc. You see where I'm going get very specific, write out a detailed plan.

2) Set a date.
For each step in your plan, write a deadline. When are you going to accomplish each task? Writing it out without saying when it should be done is a good way to ensure that it never gets done. Giving each step a deadline will also allow you to avoid getting overwhelmed by the steps and tasks. You'll be able to complete them in an orderly fashion with less stress. Staying with the example from above, if your first step is to learn the differences between retirement accounts, by what date are going to have that accomplished? Put the deadlines on your calendar as a visual reminder so you ensure they get done. Remember each task accomplished takes you closer to your financial goal.

3) Set a dollar amount.
Every financial resolution should have a specific amount attached to it. You have to have a number that you're working towards. At what number can you claim success. If you're resolved to save more money. How much money do you need to save per month, per year? Make it specific. For example, I will save $1,000 this year. Now you have a number. Now you have a concrete endpoint for when you have accomplished the goal. If we stay with the retirement example, a goal with a dollar amount would be: I will contribute 20% of my income. You know how much you make and how much should then be contributed. 

About Your Author: Maria James has a compassion for people that makes her involvement in Heal a Woman to Heal a Nation a sure fit. She is a biomedical scientist who is public health conscience and has always worked for the betterment of others. While an undergraduate student at Johns Hopkins University she co-founded an organization called STOP, which taught basic self-defense to women and children. Her has a passion for diverse communities led her to live in Costa Rica for three weeks to learn more about the culture and community. Maria also continues to pursue her other interests which include, Spanish and finance. Maria also founded the business Pocket of Money, LLC which provides tools and tips to help you take control of your money and live your best life. Meet Dr. James at our 2014 Unlimited You Conference April 11- 13, 2014 www.hwhn.org.

Holding On To Me: Life, Work, Family, Balance - 5 Tips

A few months ago, I drove to San Diego, CA on a Wednesday morning for my Global Leadership Program quarterly weekend meeting with Lisa Nichols and drove back home to Pasadena, CA on Sunday.   I spent two quality time days on the deck with my son creating memories. Then on Wednesday morning I flew to Dallas, Texas for a five-day business networking conference.

Do you feel like holding on to yourself as you juggle work, profession, life, family is getting harder?  Do you find yourself some days just whispering, “I wish I could just have a little time for myself?”

First, I honor and acknowledge each of you. Whether you’re a entrepreneur, wife, mompreneur, CEO… you rock! I honor the powerful choice that you’ve made.  I recognize that it is what fuels, inspires, and fulfills you.

How is it going for you?  Do you get that feeling in the pit of your stomach when you know you’ll miss the family gathering, parent conference or a planned event with your spouse/partner or a birthday because of work?  How do you quell the voices in your head and the chatter of self-doubt and selfishness?

Let me offer 5 tips that can soothe and honor the all aspects of you.

·       Understand your worth & significance:  At the core of all you do is your feminine energy.  This energy nourishes, creates, sustains, and ultimately is the fuel for everything you do.  When you honor you, you honor and replenish all the aspects of you. Your desires, dreams, and goals matter and are a significant part of your worth and value.  Know your worth is innate and nothing changes the value of what you bring to the table.

·         Expectations: Mine or Yours:  Too often we hear the voice of our mothers, friends and siblings whispering in our ears and allow that to determine what we do.  Whether it’s when you clean your house, how you parent your children, how many hours your work, take the time to get laser clarity on what your expectations are for yourself.

·         Create a “Me” Ritual:  What nourishes your soul and spirit?  Commit to your “me” ritual a minimum of once a week or at least twice a month.  Take a bubble bath. Walk through a museum.  Turn the music up loud and sing off key.  Read a chapter in your favorite novel.  Claim it as your ritual, put it on your schedule and then let others know.

·         Daily Spiritual Practice: Tapping Within: The energy you need to sustain your efforts and your spirit is something Bigger than yourself.  Tap into this daily just like plugging a light cord into a socket, plug into your Source, however you define it.  Meditate, pray, inspirational reading or music are just a few options but make it “your” go to practice.  Lastly,

·         Stay Connected:  Other like-minded heart centered women offer you support, resources, validation and laughter.  Making connections is the equivalent of a lifeline to sustain your success and goals. Networking, women’s groups, Meet Ups all prevent you from feeling alone as you achieve your goals.  Commit to twice a month staying connected as part of how you hold on to “you” in the midst of living your life.

In the end, holding on to you requires setting priorities, boundaries and recognizing your value demonstrated by making time to refuel and replenish. When we define our success as wholistic, we understand that we must honor all aspects of ourselves: finance, relationships, spiritual and health as necessary to hold on to ourselves.

Author: Jenenne Macklin, Wholistic Wealth Guide

Women who have woke up in the middle of their life wanting more: meaning & money, solutions & success, health & happy find clarity, courage and confidence in coaching with Jenenne.  Audiences are inspired to take the action to move beyond stuck to stand in their power, be fiscally responsible, and live a wholistic life. Whether its making a money mindset shift, creating success, getting happy first, Jenenne empowers women with tools and techniques and unique strategies to achieve their goals and stay accountable to their dreams. As a catalyst for transformation she empowers people to live their life out loud unapologetically and authentically. Visit her at www.jenennemacklin.com