Most financial professionals will give you their credentials, which will include the professional organizations they belong to. Here at Step By Step, one of our longtime associations is NAPFA: National Association of Personal Financial Advisors. In fact, many of our referrals come from their handy “find an advisor” function on the website. Every advisor is required to pledge a Fiduciary Oath annually (no sales commisions for products, complete disclosure of business practices) and adhere to a strict Code of Ethics. They provide ongoing continuing education for affiliated advisors and are often noticeable in the public sphere, promoting integrity in the financial profession. Step By Step is proud to be a part of NAPFA. We hope you’ll take 40 seconds to view their latest video: The NAPFA Story. It gives a great background introduction to how it came to be and it’s mission.
Top 5 Initial Interview Questions
One of my favorite parts about being a tax and financial advisor here at Step By Step is getting to know my clients. Relationships are the foundation of society and without a strong, trusting, confident one there is little I could do to effect positive change in the lives of my clients. One of the ways I can start building that relationship is by being as forthcoming as possible during an initial interview with potential clients. To that end, I have taken the time to pick the 5 most common questions asked by potential clients in my practice, and to provide a summary of my answer to each.
1. How much does your service cost? This will vary depending on the retainer agreement, but the minimum fee is $800. Our goal is to provide each client with more value than the cost of the service. If I don’t think I can do that, then I will tell you upfront (and I have!). In that case, it’s not worth your money or our time.
2. Why can’t I do this myself? This answer might surprise you, but you can! Why don’t you? Another example would be that I could represent myself in a court of law, but I don’t. There are professionals for a reason and a financial advisor, like a lawyer, has specialized training to practice their specialty with much greater efficiency than someone without it. It’s the value of time. You pay someone else to specialize in one area so you can concentrate on your area of expertise.
3. I just need <fill in the blank>, why are we discussing all these other issues? Our practice focuses on holistic advice that will help your entire financial health. If I were to help you mitigate the symptoms but didn’t try to cure the illness, what good would that do you in the long run? Yes, we can help with the urgent issues but I am always going to ask broader questions to make sure there aren’t other influential factors that you might not realize are there.
4. I don’t know what to ask; if you were in my shoes, what would you ask? The questions I would ask someone I was interviewing to be my own personal financial advisor are: How many clients do your work with? Will I get released if I don’t meet your minimum assets? Will I get the same level of service as someone with a higher value of assets? What are your credentials and why do they matter? If you get hit by a bus tomorrow, what happens to my information and the work you’ve done for me?
5. Why should I choose you over other advisors? You should work with Step By Step if you like me and if you value what we can do for you. It’s that simple!
Retiring Soon? Do You Have all Your Questions Answered?
If you are looking at retiring soon, do you have the answers to the questions to adequately prepare for this time in your life? I have listed below and also included in the video typical questions I help clients answer. If you have these questions, you may want to consider seeking out a financial planning professional.
- Will I outlive my retirement savings?
- What will I spend my time in retirement doing?
- Will social security be available to me?
- Should my annuity really be inside of an IRA account?
- How much money do I really need to retire?
- I want to retire early. How much should I be saving now?
- I am a teacher. What pension payout option should I select?
- What will be my cost of living in retirement?
What Should You Expect from Step By Step Tax and Financial Planning
SBS_What_to_Expect (Click here to listen to short audio version of this blog.)
What should you expect if you engage Step By Step Tax and Financial Planning for holistic tax and financial planning services?
1. Straight Talk
2. Easy Access
3. Value for Your Money
4. All-Inclusive Approach
5. Adaptive & Ongoing Service
Looking for a Planner? Want to know who we serve best?
I often get asked who would be a good fit for the services we offer here at Step By Step Tax and Financial Planning. Well just watch this short 2-minute video and you will find out.
Five Factors that Influence Your Investment Decisions
When you are making an investment decision, it is important to remember these five factors and the how they effect your decision-making process. These variables include:
1. Time Horizon
2. Risk Capacity
3. Expected Return
4. Asset Class Preference
5. Tax Status
Claiming Homebuyer’s Credit on your 2010 Tax Return
Question: I was wondering what documentation you are suggesting your clients submit to claim the $6,500 home-buyer’s tax credit.
Answer: Here is what I would do for a client
- Paper file return
- Properly complete Form 5405
- Copy of HUD Settlement Statement showing signature of buyer and seller
- Copy of mortgage statements from the last 5 years you lived in your previous home
If you follow this guideline and your claim is legitimate, you should not have a problem receiving your refund. Keep in min you will probably need to wait 6- 8 weeks to get your refund, so please be patient. For more information, please visit http://www.irs.gov/newsroom/article/0,,id=204671,00.html.
Services Offered By Step By Step Tax and Financial Planning
I often get asked to give a brief summary of the services I offer here at SBS. With that in mind, I have written the following blog post. Enjoy and please comment!
At this time, we have three predominant services we offer to individuals and businesses:
1. Fee-Only Financial Planning Retainer Service for Pre-Retired Married Couples and Entrepreneurs
Step By Step Tax and Financial Planning is a fee-only financial planning firm in the metro-Tulsa, OK area. What makes us different from many financial firms is that we offer professional, objective tax and financial planning services on a one-to-one personal level. We are an independent firm whose complete focus is on the client.
We work with a small number of individuals in order to best serve each one, remaining focused on the needs of our clients. The only compensation we receive is directly from our clients. We do not receive commissions, referral fees or third-part incentives.
2. Individual and Business Tax Planning and Preparation
Along with the holistic financial planning services we offer to our clients, Step By Step Tax and Financial Planning, LLC also services the tax preparation needs of many individuals and businesses. Kevin Jacobs, CFP®, EA is enrolled to practice before the IRS.
The fees for tax preparation are very straightforward. We serve the needs of our tax preparation clients on an hourly basis. For individual clients, the hourly rate is $75/ hour for the first four hours and $37.50 for each additional hour after the initial four. For business returns, the hourly rate is $75/ hour. There is a minimum fee of $75 for all returns. If you are looking for a second opinion on your individual or business return, we also offer that service at our standard business tax preparation rate. There are no additional charges for e-filing or document preparation.
3. 401k Retirement Plan for Small (as few as one participant) to Medium-Sized Companies
If you are looking to start a 401k plan for your company or if you are not happy with your current provider, please contact me so we can discuss the benefits of a multiple employer plan. Most small businesses do not know the liability they take on in offering a plan to their employees. On top of that, the fees charged by most providers are astronomical for the small to medium-sized businesses. You have nothing to lose by setting up an initial consultation for us to discuss your company’s retirement plan.
Common “Do-It-Yourself” Tax Preparation Mistakes
I find three of the most common “do-it-yourself” tax preparation mistakes include capital gains, business asset depreciation and rental home cost basis.
Many people do not know the difference between short-term (1 year or less) and long-term (1 year and 1 day+) capital gains tax treatment. I have met individuals who had to pay more in tax then necessary because they sold their asset within a day or two of it becoming a long-term asset. Knowing the difference between short-term and long-term capital gains can save you up to 20% or more on your federal return. If you receive an inherited asset, it is deemed to be a long-term capital gain and it receives a step-up in basis. This means your basis is what it was worth on the day the grantor died. If you have capital gains on your return and/ or your received an inherited asset, I strongly encourage you to seek out a professional and competent tax professional.
Moreover, another area worth significant tax savings on your return is calculating and planning your business asset deprecation correctly. I have had to amend many returns to correct their depreciation schedules. It is important you keep your purchase documentation for business assets and allow your tax professional to determine the best course of action in preparing your depreciation schedules. Many times, if I have a start-up business, it is more advantageous to depreciate business assets rather than taking a Section 179 expense deduction. If your business is showing a loss even before you have calculated depreciation, it is probably not in your best interest to expense the asset.
Finally, cost basis tracking on rental properties is another area where I see common mistakes. This is especially evident with converted personal to rental property. If you convert your home from a personal residence to a rental, your basis for depreciation is either the FMV (Fair Market Value) or adjusted basis at the time the property was converted. The adjusted basis is the original purchase price of the home in addition to many improvements and purchasing expenses. The basis for your rental property is the lower of these numbers (current FMV or adjusted cost basis).
Unless you have a very simple tax return, I strongly encourage you to seek out the advice of a competent professional. Tax preparation work is very tricky and can cost you in the long run if it is not done correctly. If you have capital gains, business depreciation or rental property on your return, I would consult with either a CPA or Enrolled Agent before filing your own return. The value of a good professional should far outweigh any fee they may charge.
R U Ready for 2011? “Retool” Presentation Notes from BA Lead$ Summit
Below are my notes and questions I used for the Lead$ Summit today at the Broken Arrow Chamber of Commerce. Use these notes to help you “retool” for the New Year! Feel free to leave comments below.
Retool
Presented by: Kevin Jacobs, CFP®, EA
Owner of Step By Step Tax and Financial Planning, LLC
Definition of Character
- “The ability to meet the demands of reality.”
- Dr. Henry Cloud, Integrity, pg. 24
Aspects of Character
- “The ability to connect authentically (which leads to trust).”
- “The ability to be oriented toward the truth (which leads to finding and operating in reality).”
- The ability to work in a way that gets results and finishes well (which leads to reaching goals, profits or the mission).”
- The ability to embrace, engage, and deal with the negative (which leads to ending problems, resolving them or transforming them).”
- The ability to be oriented toward growth (which leads to increase).”
- The ability to be transcendent (which leads to enlargement of the bigger picture and oneself).”
- Dr. Henry Cloud, Integrity, pg. 35
http://www.drcloud.com/index-5.html
With knowing the definition of character, now we can progress at evaluating our life and retooling for the future.
General
- Are there things you want to do that you haven’t done yet?
- What is not working in your life?
- Is your life in balance?
- Do you have enough leisure time, vacations, travel, hobbies, and fun in your life?
- What is your “top ten” list and what are you doing do achieve them?
- What are 10 things you most love doing?
- Are there any big adventures you want to have?
Physical
- How’s your health? Are there changes you want to make?
- Do you want to reduce stress or increase your level of fitness?
Educational
- Are there areas of personal growth that you would like to pursue?
- Is there a degree or professional designation you want to receive? What steps are you taking to achieve it?
Social
- Are you as involved as you would like in your community?
- Are your friendships what you would like them to be, in terms of both quality and quantity?
Vocational / Business
- Are you happy in your current career or profession?
- Is it rewarding for you?
- Do you want to increase your income?
- Is your business profitable?
- Do you want to start a business?
- Are there planning or marketing ideas you would like to pursue for your business?
- Are you working a reasonable number of hours?
- Have you set your 2011 business activity and income goals?
Financial
- What priority does money take in your life?
- What are you building wealth for?
- How much do you need?
- Are there changes you would like to make in your income, expenses, cash flow, debt, savings, reserves, emergency funds, investing, taxes, or net worth, for example?
- Are you making the progress toward your retirement / financial independence that you would like?
- Are there any impending financial decisions that you need to plan for?
- Is college education funding for your children / grandchildren satisfactory?
- Are there any changes or improvements you need to make to your home?
- Is your estate planning up to date? Are you on track to leave the end-of-life gifts you want to make?
- Have you reviewed your insurances recently?
Family
- Are there family goals you have – trips, more time together, for instance?
- How is your relationship with your spouse?
- How are your relationships with your children?
- How are your relationships with other family members – siblings, parents, confidants?
- Are your family members taken care of for the future?
- Do the important people in your life know how much you love and care for them?
Philanthropy/ Charitable Giving
- Do you want to volunteer more – or differently?
- Are your charitable contributions at the level you would like?
- Are you satisfied with the legacy you plan on leaving?
Spiritual
- Are there things you want to simplify or consolidate in your life?
- How is your spiritual / religious life? What can you do to improve it?
- Are there any spiritual growth activities you want to participate in?
Virginia: Update: we got the pre-approval letter! The realtor took us out to v...
Chuck Rylant: These video blogs are very helpful. I think time horizon is what many ...
Chuck Rylant: This is very helpful information. Good basic foundation information an...
Business Financial Planning: This is certainly a thing I have to do more research into, many thanks...
Khalilah: This is certainly a thing I have to do more research into, many thanks...