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Smart Money Monthly
November 2024
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GRATITUDE AND HONOR CELEBRATING CHEER AND SACRIFICE IN NOVEMBER It's no secret that these are polarizing times for America. No matter where you sit on the political spectrum, we should prioritize November as a time of remembrance and gratitude. Our society may sometimes be fractured,
Unlike Memorial Day, which commemorates our brave soldiers who made the ultimate sacrifice, Veterans Day specifically honors living veterans and expresses appreciation for all they’ve done to keep our nation safe. In addition to our local heroes, our nation’s long list of brave veterans includes such celebrities as “Star Wars” actor Adam Driver, filmmaker Mel Brooks, and actor Chuck Norris. I hope this coming Veterans Day inspires you to reflect on those remarkable people in your life who served our great country. It’s a gift to learn from their stories and celebrate all they’ve given us — in November and throughout the year. Veterans Day always makes me think of my father’s courage when he served in the Vietnam War. Many of our families and neighborhoods are full of folks who answered the call when our nation needed them, and every one of them deserves our undying respect and appreciation. As for Thanksgiving … well, you may want to sing “Mary Had a Little Lamb” after enjoying your turkey this year. Why? Few people know that Sarah Josepha Hale — the poet behind the famous nursery rhyme — made Thanksgiving what it is today. In 1863, she convinced President Abraham Lincoln to declare it a national holiday to provide our country with a positive activity in light of the Civil War. That’s an exciting piece of singalong trivia to bring up at the table this year! On a serious note, I’m thankful for everyone who’s positively affected my life. I’m fortunate to live and work in such a great community, and I’m grateful to my clients for entrusting Roberts CPA Group to serve their needs. When I look at the many handwritten thank-you notes we’ve received, I’m humbled to know we’ve made a
but we must never lose sight of the freedoms we enjoy and always celebrate those extraordinary people who risked their lives to provide them for us. This month is also a time to give thanks for the blessings in our lives — from our loved ones to the work that enables us to prosper. That said, I’d like to share a few thoughts (and interesting facts) on Veterans Day and Thanksgiving. Veterans Day is an American holiday with a rich and fascinating history. First, its date is highly significant, as Nov. 11, 1918, was the day an armistice was signed to end World War I. Three years later, an unknown soldier from the war was buried in Arlington National Cemetary, which became a destination for U.S. citizens who wished to honor the fallen soldiers who fought for our freedom. In 1926, Congress named Nov. 11 “Armistice Day,” which became an official national holiday in 1938. In 1954, President Dwight Eisenhower signed a bill officially renaming the holiday to Veterans Day. After moving it to the fourth Monday in October for 10 years beginning in 1968, Congress returned the day to its original date to draw attention back to its origins.
difference. Your faith in us is something we’ll never take for granted. May you all enjoy a Thanksgiving full of love and joy! —Kevin Roberts
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Lock in a Fail-Safe Savings Plan
Budgeting and saving are skills many Americans learn late in life, if at all. Only 36 states require high schools to offer personal finance courses. While that’s a marked increase from seven states in 2000, it still leaves many Americans adrift. Many consumers benefit from setting up regular automatic deposits
Automate retirement savings. If possible, put 10%–15% of your paycheck into a retirement account, such as a 401(k), Roth IRA, SEP-IRA, or another investment account. To help you meet this lofty goal, take full advantage of any matching program your employer offers. That’s free money! Open a brokerage account. A regular investment account gives you access to stocks, bonds, and other instruments. Most advisors recommend a low-cost index fund as an initial investment, but if you are uncomfortable with stock market volatility, consider certificates of deposit or bonds. If you hold investments for at least one year, your earnings will be taxed at the long-term capital gains rate — far less than the tax on your ordinary income. Set up a health savings account. Health savings accounts (HSAs) are a powerful way to set aside income tax- free to pay medical bills. They offer a triple tax advantage in that deposits, earnings, and withdrawals are tax-free if you use withdrawals for eligible medical expenses. You can sign up for these plans through an employer or HealthCare.gov by opting for an HSA-eligible health insurance plan. To determine how much to deposit, search online for “HSA Contribution Calculator.” Unlike other tax-sheltered savings vehicles, HSAs do not have a “use-it-or-lose-it” requirement, so you can accumulate funds for the future.
to each of the four key savings and investment accounts, either through paycheck withholding or via their bank. With this system, growing their savings requires no conscious effort.
Start an emergency fund. Deposit 2% of your paycheck into an emergency fund, either a high-yield savings account or a money market fund. These accounts currently yield about 4% annual interest or more, so your money will be working for you. Work toward setting aside enough to cover at least three months’ expenses to avoid using high-interest credit cards. Willie Nelson’s Wild Tax Ride At 91, the great Willie Nelson is one of the world’s most beloved and longest-running entertainers. As his classic 1980 song “On the Road Again” suggests, he’s likely traveling on a bus to his next show as you read this. Although his gifts as a performer are indisputable, his talents in tax preparation are infamous — and almost cost him everything. In 1990, the IRS went after the country superstar, known for his high- spending ways, to collect $32 million in back taxes. Unfortunately, his finances at the time — which, according to his daughter Lana, were less than $50,000 — didn’t allow him to settle the debt. Fearing a prison term, he promptly sought legal assistance. He also shipped his cherished guitar, Trigger, to Hawaii to prevent it from being seized along with his ranch and other possessions. Although Nelson’s lawyers were able to negotiate his debt down to $16 million, the reduction did little to calm the singer’s concerns. In a surprising move, the singer arranged to release an album in 1991, cheekily named “The IRS Tapes: Who’ll Buy My Memories?” to solely use its proceeds to help pay off the high bill. Unfortunately, the album generated only $3.6 million in sales. He continued to do all he could to get money, including appearing in a TV commercial for Taco Bell. In 1993, Nelson struck a deal with the government to finally put the nightmare to rest. In addition to giving the IRS the money raised by Off the Road to Wealth
Photo Credit: joshbg2k
the album's sale, he reportedly agreed to pay an additional $2.4 million over three years before adding a final payment of $3 million. Based on these figures, the ordeal ultimately cost him $9 million — nowhere near the original amount owed but still a costly example of gross financial mismanagement. In addition to decades of unforgettable music, Willie Nelson has taught us an invaluable lesson on the importance of working with trusted tax professionals who have our best interests in mind. After all, not everyone can whip up a country album to help save their assets.
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Greek Chicken and Rice
• 2 tbsp olive oil • 1 onion, diced • 2 cloves garlic, minced • 2 lbs boneless, skinless chicken breasts, cubed • 1 tsp dried oregano • 1 tsp dried thyme • 2 cups chicken broth INGREDIENTS
MONEY PIT PREVENTION Avoiding Small-Business Tax Traps There’s more to running a successful small business than providing exceptional services. As anyone who’s steered their own ship in business knows, keeping things afloat often involves managing mountains of paperwork. Unfortunately, even a small tax mistake could sink your entire operation. Here are three simple reminders to help you avoid oversights that could cost you more than just your peace of mind. KNOW YOUR PEOPLE. Miscategorizing staff members’ tax status is perhaps the biggest — and most common — mistake small-business owners make. There is a world of difference between W-2 employees and independent contractors, and failing to differentiate between the two properly can cause costly headaches at tax time. If your business utilizes remote workers in various states, it’s critical to understand their states’ laws and the steps needed if/when an employee moves to another state, changes their marital status, or has another reason to update their tax status. BE CAREFUL WITH CYBER DOCUMENTATION. With everything from apps to cloud-based servers replacing large file cabinets in most offices across America, organizing critical business documents has never been easier. However, not a day goes by without news reports of significant data breaches, identity thefts, and other cyber threats. While going paperless could be a convenient solution, it could also be disastrous if hackers find your data. So, secure your data. Also, ensure you regularly back up any information you store digitally in case of a technical issue or system failure. DON’T FLY SOLO. Many small-business owners confuse independence with the ability to handle everything that comes their way. Successfully navigating business taxes is a complex process that requires a considerable investment of time — something few owners have. Working with experienced tax professionals alleviates that time crunch and enables businesses to focus more energy on serving customers and growing revenue. We are always available to help you address any concerns with your current in-house tax structure and better prepare you for the logistical challenges ahead. Please contact us if we can assist you in making those mountains of paper in your office safer and more manageable.
• 1 (14-oz) can diced tomatoes • 1 cup uncooked long-grain white rice • Juice of 1 lemon • 1/2 cup feta cheese • Salt and pepper, to taste
DIRECTIONS
1. In a large skillet over medium heat, heat olive oil and sauté onion and garlic until softened. 2. Add chicken, oregano, and thyme and cook until the chicken is no longer pink, about 3–4 minutes. 3. Pour in chicken broth, diced tomatoes, and rice. Bring to a boil, then reduce heat to low and cover. Simmer for 15 minutes or until the rice is cooked through. 4. Stir in the lemon juice and feta cheese, then season with salt and pepper.
SUDOKU
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INSIDE THIS ISSUE 1 Thankfulness and Remembrance 2 4 Must-Have Savings Accounts to Secure Your Future A Country Crooner’s Cash Crisis 3 Small-Business Tax Security Greek Chicken and Rice 4 Fortunate Furry Friends and Their Trust Funds
Celebrities Secure Their Pets' Futures WHY A PET TRUST IS THE IDEAL OPTION
It might sound silly at first, but including pets in your will is a way to ensure your beloved animals are cared for after you’re gone. But these celebrities take it to the next level. Let's look at three famous examples and the legal nuances behind leaving millions behind for a furry friend. JOAN RIVERS Joan Rivers, the legendary comedian and TV host, passed away in 2014 at 81. Rivers left a considerable portion of her $150 million fortune to her four dogs — two rescue dogs in New York City and two in Los Angeles. OPRAH WINFREY Oprah Winfrey, the iconic TV legend, has proactively set aside $30 million in her will to care for her dogs once she passes. Over the years, Oprah has had over 20 dogs, and she
wants to ensure her furry companions continue to live in comfort even after she is gone. KARL LAGERFELD When the iconic fashion designer for Balmain and Chanel passed away in 2019 at 85, he left a portion of his $300 million fortune to his beloved Burmese cat, Choupette. LEGAL ASPECTS OF INCLUDING PETS IN WILLS While you may not agree, by law, a person cannot directly will their property to an animal because an animal is also considered property. Instead, you can include a provision in your will that sets aside a certain amount of money for your pet. However, this method is not typically recommended, as there is no real oversight to ensure the funds are used exclusively for the pet’s benefit.
A pet trust offers a more reliable way to meet a pet’s needs after you pass. In a pet trust, the trustee delivers the money to the caretaker, who looks after the pet. Additionally, the trust has the legal right to supervise the caretaker and ensure they use the money as intended. Setting up a pet trust is a practical and legally sound solution for those who want to ensure their pets are well-cared for after they're gone. Of course, it doesn’t have to be millions!
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