New Year, New Financial Tips! – transcript – Kurt Baker

Written by on December 30, 2018

New Year, New Financial Tips!

Our host, Kurtis Baker, discusses financial tips for the new year!


00:55 Kurt Baker: You’re listening to a podcast of Master Your Finances, with me, Kurt Baker, a certified financial planner professional, Sunday mornings at 9:00 AM on




01:04 Announcer: Another day, another dollar and our certified financial planning professional, Kurt Baker will give you the tips you need to turn that single into a sea of green with Master Your Finances. Whether you have enough to get by or too much in your pockets, Kurt Baker and his weekly guests are here to show you how to manage it all. Master Your Finances is underwritten by Certified Wealth Management and Investment LLC. Now listen up, because it’s time to get a hold of those money matters and Master Your Finances.




01:31 Kurt Baker: Morning and welcome back to another edition of Master Your Finances, presented by Certified Wealth Management and Investment. I am Kurt Baker, a certified financial planner professional, I’m hosting your show today. My office is located in Princeton, New Jersey. I can be reached through our website, which is, or you can call me directly at 609-716-4700. And today, we’re gonna talk a little bit about year end. We’re getting near the end of the year and hopefully everybody’s had really good holidays, Hanukkah, Christmas, etcetera. And you had a chance to spend a little bit of time with family. And this is really kind of a good time, first of all to be kinda thankful for everything you’ve had in the year that you’ve had, and all the good things that have happened and hopefully there weren’t too many negative things that occurred. But those things also to take those and do the best we can with those. I know for some people this time of the year could be a little bit difficult, especially if you lost anyone and things like that. So, for all of us it’s kind of a time to wrap up the year, and think about all the good things that we have and be thankful for those and to start planning for next year.


02:44 Kurt Baker: It’s another word at the end of the year and New Years is coming right up in a few days. There’s a couple of things that we can do and hopefully some of these you’ve done at the year end, as well as the beginning of next year, and I’m gonna go through a few of those things and… Because it’s a good time to think about everything that we’ve got going on as far as our… Not just our personal lives, that’s very, very important, ’cause that’s what all this is about. The financial planning aspect is really about how do we support our lifestyle and our loved ones, the way that we want to, and this is really just the mechanics of how we get that done. So, starting from there, we wanna really just be thankful for what we have and just make sure that all of that is in order and our family life is in order. And then we can work on the financial part of it, and put those pieces into place. So I’m just gonna go through a few of the tips that are recommended to look at throughout the year, and then we’ll get into some of the planning aspects as we go through, depending on how much time we have today.


03:42 Kurt Baker: Here are some of the suggestions at year end, a biggie is… Depending on your age if you are… The required minimum distributions, so the RMDs are important thing to keep in mind. If you’re 70-and-a-half or older, you’re required by the IRS to take required minimum distributions from certain types of retirement accounts, and that’s due by December 31st. So hopefully you’ve done that, but if you haven’t, you really need to take care of that on Monday, since that it will be the 31st. Or if you don’t do it, and it’s required, you’re gonna have a penalty of 50% of the sum that you failed to withdraw. And so, if you turn 70-and-a-half this year, you really… Also, if you just turned 70-and-a-half this year, you will have until April 1st of 2019, to take your first required minimum distribution. But there may be some consequences. So be aware of that, hopefully you review those options with your accountant and know what you should or shouldn’t be doing.


04:45 Kurt Baker: I have clients that we’ve been talking about this year. In December, most of them will take them near the end of the… If they don’t need the income during the year, what we’ll do is, we’ll take an annual distribution from things like annuities, along those lines or even retirement accounts, if they don’t really need the money that way, hopefully it can grow throughout the year. And then you’re gonna take it either when the annuity matures or at the end of the year, which is typically in December. So, if you have something set up automatically, which many people do, many of the insurance companies will set it up or Annuity companies will set it up, so that required minimum distribution will automatically be distributed to you. But you need to make sure it actually happens, because it’s actually your responsibility to make sure that distribution occurs even though the insurance companies will put the mechanism into place to transfer those assets, typically it’s a checking or savings account that you designate, or they’ll mail you a check. And then once you have that, you wanna deposit it and of course invested however you wish to invest it.


05:44 Kurt Baker: Because what I found with many of clients is some of these accounts, they don’t necessarily need the money to live on, and if they don’t, they’re really trying to save that and re-invest it, either for other purposes, or maybe for their legacy or some other reason. So it’s very important to manage it correctly, don’t wanna be paying unnecessary penalties on these requirement of distributions that you’re required to take. Another thing that you would like to take a look at is you want to reduce any capital gains. This is where you can offset your losses and gains against each other. This year has been a very volatile year, so you may have some things that you can offset your losses and gains against. So just kinda pay attention to that. Talk to your advisor and see where you stand with that and offset the losses and gains. You can offset an additional $3000 in ordinary income against any losses beyond the limit that could be carried forward for future years. So you’ve got a little bit of flexibility there, against your ordinary income, so you wanna make sure that you take advantage of that. And since we’ve had the volatility throughout the year, you may have some ability here in the final few days to offset any gains you’ve had with losses and match them up, match up the trades, so you don’t pay unnecessary taxes.


07:04 Kurt Baker: Another thing that many people have, they’re called health savings accounts. In 2018, those with the high deductible insurance plans, which a lot of those are in the healthcare exchange, they can put away as much as $3450 before taxes, and for families, the figure is $6,900, and those for 55 and older, can add another $1000 to that. So that’s essentially a savings account for health expenses. And some people can think of those as like an IRA for healthcare, because you basically setup an account, you can put this money and they’re just like you can with an IRA. The only difference is, the purpose for that money is for healthcare expenses, so if you have one of these high deductible plans, which you would get through the exchange and some employers offer them as well, where you may have a $4000, $5000, $6000 deductible for an individual, maybe up as much as $11,000 $12,000, $13,000 for the family, you can put these assets away ahead of time.


08:09 Kurt Baker: And that way you’re using the pre-tax money to pay some of those deductible items you’re gonna need to pay upfront. That’s one of the negatives people talk about, as far as the exchange is that many of those plans have a pretty high deductible. They’re great if you have a catastrophic event and you have a very expensive healthcare expense, but a lot of people complain is that, they’re paying the first $3000, $4000, $5000, $6000 themselves in expenses. But there is a way to kinda help with that, if you setup one of these health savings accounts. And you wanna make sure when you you sign up for the plan itself, you wanna make sure that it qualifies to match it up against a Health Savings Account. So, as long as you do all of that, you can definitely put away a little bit of money before taxes and at least get a little bit of a tax savings as far as that goes.


08:58 Kurt Baker: There’s another account, which I know we used to have. My wife worked at Merrill Lynch many years ago, we had a flexible spending account. And I’m seeing less of those now, but they still do exist out there, and the flexible spending account is a little bit different in that, you either use it or lose it. So, if you have money that you essentially designated at the beginning of the year that you thought you were gonna be using for healthcare expenses, and you can… Technically you’re supposed to be using that money by December 31st, or you lose it. So let’s say at the beginning you said, “Well, we think we’re gonna have $2000 in expenses this year,” and maybe you’re at $1500 so far, that you’ve taken the withdrawal from the flexible spending account, so you wanna try to find a way to use up that last $500. And so people will setup appointments with the doctors and dentists things like that, to try to use up that extra $500.


09:53 Kurt Baker: Some of the plans have in them a little bit of a grace period. If your’s has that, it can be up to two-and-a-half months and you can… So you might have a little bit more time beyond December 31st, you just need to know your plan, and whether or not you have any flexibility, but once those deadlines have passed, if there’s still $500 in that account, you lose it, that’s it, done, and then you move into the next year. But also in addition to that, some of the plans allow a little bit of a carry over, and that carry over can be up to $500 a year. So just make sure you understand your plan. Those are employer-sponsored plans, and you need to understand how it works, what the options are in HR. And usually, I found that many of your co-workers will have some knowledge of that. The websites themselves, I found they’re very good at putting together information about how the plan works and what the options are. But you wanna make sure you’re very clear as far as how all of those work.


10:52 Kurt Baker: Because you don’t wanna lose money that’s yours, especially when it comes to healthcare expenses. Another thing you may wanna do is, if you have children or if you have grand-children and things like that, you may wanna contribute to a 529, which is for college expenses, and the college expense, it’s just a good thing to do at the end of the year. In some cases, you may have some State income tax benefits or as well as the Federal gift tax exclusion may apply. So that’s another area you wanna think about as far as your planning goes and see whether or not you may wanna make a contribution to a 529 plan. And when we come back in just a few minutes, we’ll talk about some of the things that you also might wanna do here in the spring. We’ll come right back.




11:36 Announcer: It’s all about how you manage your money. Now, let’s get back to learning how, from Kurt Baker, a Certified Wealth Management and Investment with Master Your Finances.




11:49 Kurt Baker: Welcome back, you’re listening to Master Your Finances. I am Kurt Baker, a certified financial planner professional, and we’re kind of talking about some year end strategies, as well as some early 2019 strategies, as well. And some of those things are, you wanna make sure you kinda wrap up the year, and you use up any of the the medical accounts that you might need to use up, such as the flexible spending account, some of them will flow over to the next few years, such as the health savings account and that’s kind of really like an IRA for healthcare expenses. So if you have extra money, and you’re able to… Even if you’re not thinking… If you have the access to an HSA account, it is a good way to do tax deferred growth for healthcare expenses, especially if you’re younger and you have a little extra income. Because it is similar to an IRA, the only big difference is the fact that it has to be used for healthcare expenses. So you never know, even though it’s only a few thousand dollars over time, that can add up and you never know, over 5, 10, 15, 20 years you might have $30,000 $40,000 $50,000, $60,000 in these accounts, because they’ll grow tax deferred, and then if you have a catastrophic event, where you have some expenses that require the high deductible or the other issue that sometimes comes up is things outside of the plan itself.


13:01 Kurt Baker: One of the sayings is, “If you can have health insurance doesn’t necessarily mean it’s gonna cover everything that you have.” Just one thing that I’ve noticed is, like in the exchange, clients who are on the exchange, they don’t have the PPO option anymore, which means you can go outside of the network and take a specialist, if you wish in the plan. There’s no choice for that currently, although most employers still have that option available. And that really comes up when you have somebody very specific you want to go to for a very specific medical reason, where I’ve seen it as things with psychiatrist, psychologist, things like that. They don’t typically participate in most reimbursement plans, because the reimbursements are very low and they tend to be in high demand, and they don’t wanna take the lower fees, so to speak. So a lot of the highly rated professionals in that area, I know there’s other specialties as well, where you may have to go outside of network. So you always have to think about those things that are in the network, as well as those things that might be outside of the network and how you might plan for it. You just never know, you just never know. So it’s a good idea.


14:05 Kurt Baker: Again, if a have a little bit of extra income and you’re able to put… You’re fully funding all of your accounts, it’s a good idea to also fully fund an HSA account, which you can take and they are portable and you can move them with you as you go on. That is your account, that is your money, again, similar to an IRA. Again, we wanna make sure that you’re taking that requirement of distribution, if it’s due. If you turned 70-and-a-half this year and you chose to delay it a little bit, you have to do it by the April 1st, 2019 to avoid the penalty. There may be some qualifications there as well, so just be aware of the rules before, when you get in that 70-and-a-half range, you just wanna make sure you understand it, just review what you’re doing during that period of time, make sure you do it correctly. Of course, Tax Day is coming up, and this is the time we wanna start putting together all of our documents. That’s gonna be April 15th this year, and you wanna make sure that either that you apply for the taxes, you file them on time, and you pay the taxes on time. Or if you’re a business owner, many business owners have to do extensions for one reason or another, just make sure you do the extension and pay the estimated tax by April 15th.


15:07 Kurt Baker: Again, you wanna make sure you’re funding your retirement account, so if you have an employer-sponsored account, like a 401K, or 403B, things like that, you wanna fully fund as much as you can comfortably and take advantage of that. You’ll have up until April 15th to fund the IRA for 2018. Right now, it’s $5500 for most people, or $6500 as an extra $1000 catch-up, if you’re 50 or older. So take advantage of that if you can and put it in there and if you can also, if you know you’re gonna be doing an IRA, it’s nice to setup a budget and start paying a little bit at a time. So, essentially pay $400, $500, $600 a month, that way by the end of the year, it’s already funded and you’re getting the advantage of investing early in the year. So, if there is an increase in the market, you’re also gonna get the increase in whatever assets that you’re putting into account initially, as well. Another thing that people should really do, I don’t think we do this enough, is that kinda revisit your withholding on your W2. Many people look at a job with an employer, they go in and they’ll say, “Well, here’s how many exemptions or how many withholdings I want on my return,” and they check a box, whatever one, two, three, whatever the number might be at the time, and then they find out later on they start getting very large refunds back at the end of the year.


16:30 Kurt Baker: If you’re getting a very large refund on a constant basis, that probably means your withholdings are off. Because you’re really giving the government an interest-free loan for the year. You want that to be a little bit closer. You don’t wanna go way under, where you’re writing a big check every year, but you also don’t wanna go way over either, where they’re sending you back a large check at the end of the year. So, there’s a balancing act there and throughout the year, you can do updated estimate, sometimes people don’t realize that. So if you get a new job, or you get a raise, or something occurs in your life, or you have a new dependent or another expense that’s going on, buy a house, things like that, where you’re gonna have an interest deduction as an example, you can make those adjustments and most accountants will be happy to do that calculation for you and let you know what your estimated withholding should be, and then you can adjust that with your employer. In that way, it matches up a little bit closer to what the reality should be at the end of year. That way you’ve got the a small buffer as far as how much is gonna be due or how much is gonna be due back to you at the end of the year.


17:36 Kurt Baker: Another thing that it’s really a good idea to do once a year is go back through all of your accounts and look at your beneficiary designation. If you have an insurance policy as an example, just double check it. Some of these things are now available online, where you can actually login bank account beneficiaries, retirement accounts and things like that. Double check it and make sure that it’s correct, because you don’t want that to be incorrect, especially if there’s been any changes, where there’s been a marriage or divorce or a birth or death, things like those, major life events, especially. You wanna go back in and check it because sometimes you may have assets going to an individual or individuals that weren’t intended, and one way to kinda keep up with that, is just to make sure that the beneficiary designations are set up correctly, and doing that once a year is kind of a good idea. Just review it, make sure it’s correct, if it’s correct, that’s good, you’re good to go. And that way there’s no headaches later on if something where to happen, where the assets are being transferred and may possibly be transferred to the unintended person or individual or entity.


18:45 Kurt Baker: Another thing that I would highly recommend that you do on an annual basis is to check your credit on an annual basis. Identity theft is a real big problem these days, especially this time of year, where everybody’s out shopping, using online portals and things like that. There’s a lot of scams out there where they try to get your credit card information or they outright steal it from another database. We all know about the Equifax breach that happened a little while back. And so, these things are ongoing and it’s really… They say it’s not a matter of when… If it’s gonna happen, it’s really matter when is it gonna happen? And most people have had some type of breach on an account at some point. Well, one way you can defend against that is to on an annual basis, go to, it’s, and that is the true free site to get a copy of your credit report and just check to make sure there’s no information on there that’s wrong. Somebody hasn’t open up an account that’s not yours, things like that.


19:50 Kurt Baker: Another thing that you can do in addition to that, is to put an actual freeze on your account, that way nobody can pull your credit or have access to your credit information without it being unlocked first. It just adds an extra layer of security. In that case, you would need a login to the account, you need a pin, in that way it unlocks, and then you can access it, and if you unlock it you generally wanna unlock it, just for a short period of time, because if you do wanna open up credit, buy a car, buy a house or even get a new job, things like that. Or in some cases, licensing, there are certain times where people do need to access your credit report, they’ll just tell you, “Hey, look, we need to access it,” just ask them what bureau it is, or bureaus, usually it’s just one of the three major ones, which is Equifax, TransUnion, and Experian, but there’s also a fourth one called Innovis.


20:40 Kurt Baker: So you wanna check all four of those yourself and freeze all four of them yourself. But when somebody needs to access it, you can just unlock the one or more that need to be unlocked that way, it just makes it harder for the identity thieves to get access to your account, and take over. ‘Cause the worst thing in the world that can happen as far as your credit goes is if somebody literally takes over your identity, and I’ve had clients in the past that have had trouble getting it back, because once they take up over all aspects of your identity, it becomes almost impossible to prove you are who you are, as opposed to the other person, because they have the same information that you do. So it just makes it a lot trickier and you wanna make sure you take care of all that. It’s very important to keep up with all these things and to take care of it. And when we come back, we’ll talk about a couple more things that we need to do as far as maintaining on an annual basis, things that we need to do and take care of, when we come right back in just a few minutes.




21:35 Announcer: It’s all about how you manage your money. Now, let’s get back to learning how, from Kurt Baker, of Certified Wealth Management and Investment, with Master Your Finances.




21:49 Kurt Baker: Welcome back, you’re listening to Master Your Finances. I am Kurt Baker, a certified financial planner professional, and we’re kinda talking about some year end thoughts as far as what we should be doing if we can, now that we’re getting down at the end of the year, as well as some planning. This is kind of where I think a lot of people really kinda think about all the great things hopefully that happened in the past year and what we’ve learned and then what we can start to do as far as planning and making next year, even a little bit better. The good news is, even though this year was a little bit volatile here in 2018. In general, the year after a mid-term election is usually a good year for the market. So we’ll see if that pans out. We’ll talk about that in a year. But the good news is, even though we’ve had a lot of ups and downs and a lot of interesting things going on as far as the market goes, overall, in general, usually things work out pretty well in the year after a mid-term election. So let’s hope that happens this year and things calm down a little bit, that’s what we’re all hoping for.


22:49 Kurt Baker: The market believe it or not actually likes a little bit of gridlock in government, because that means that not as many things change, and they like predictability as a market that way they can kinda figure out what to do. That’s the theory, we’ll see what happens. Another thing that you can do as far as year end, if you’re self-employed, or if you have some flexibility with your employer, is to decide when to take income. If you’re self-employed, in some cases you can either take income early in 2018, or you can push that into 2019, if you choose. In some cases, the same thing is with employees, in some cases, employers give them flexibility as to when to take their bonus and whether or not they’re gonna take it in December or whether or not they’re gonna take it in January or later. And depending on how flexible the employer is, sometimes they’ll do that. I know I’ve had some clients that have had severance situations where for whatever reason that the employer has decided they’re reducing the force, or they’re offering voluntary severance packages and things like that. And I’ve had a number of clients that have been very successful in negotiating when they’re actually gonna take the various pieces of the income and employers have been pretty responsive to that.


24:03 Kurt Baker: From their perspective, it’s not usually a big deal. But of course, it can make a big difference from an employee standpoint, as far as when they may take it. As an example, let’s say, you’re working this year, and you’re gonna have a severance maybe in November, December, of this year, but you’re not even sure if you have a job for next year, so you might wanna defer some of these lump sum payouts that may occur in 2019, because you may or may not run out of your unemployment and your benefits. And so next year it can theoretically be a down year for you. And then on the other side, of course, you never know, you might get a job that’s even better and it could be an up year. So there is a little bit of a risk depending on what you think you might be stepping into when you’re changing jobs, but it is something to think about as an employee when to take your compensation, if you have some flexibility or as a self-employed person, you can kinda move things around a little bit as far as when to take the income depending on what type of corporate structure you have setup.


24:57 Kurt Baker: So these are things that to kinda think about this time of year, and even if you don’t… Even if you have a company that has a year end on December 31st, you can decide, well, should we buy certain assets right now, and spend down so that way we’re reducing how much net income we have? Or do we wanna buy those assets next year? So there’s a lot of things that you can do from a planning perspective, as far as kind of adjusting that income. And these things in general, you wanna do a little bit earlier in December if you can, to calculate these out and just kinda think… Estimate where your numbers are gonna end up at the end of the year. But you’ve got one more day it sounds like, so maybe you can make some of those adjustments before the 31st. Or if you have a… Of course, if you have an off-tax year like March 31st, where you have a fiscal year, then you still have a little bit of flexibility, where you can take it in that period of time.


25:48 Kurt Baker: Now that we’re getting into essentially the tax season, so to speak, you need to start putting together some of that information that is gonna be necessary if we’re doing the taxes as well. And when you do this, it’s always a good time to kinda review and you can consolidate. Sometimes you might even have multiple statements that come through, and you may decide, well, for whatever reason, you’ve opened up multiple IRAs, you have multiple accounts, you may decide that you wanna start consolidating some of these and just to simplify your life a little bit, and that way you have less reporting to do at the end of the year. Sometimes that happens, there are ways to consolidate all these things, and when it’s appropriate you can go ahead and do that. Another thing that you can do now is, and that kinda reflects the volatility of the market, is if you have a your asset distributions, you wanna think about rebalancing those. In other words, this past year, even though the US market’s been a little bit volatile, we’re down just a little bit as of the most recent information, however some of the overseas markets are even down a little bit more.


26:58 Kurt Baker: So if you are invested in an international basis, and that’s part of your strategy, you may actually be re-allocating to some of these other countries and other indexes and things like that. So this is the time to re-look at the strategy in general, and if you still wanna hold to that same strategy, it might be a time to re-balance between your assets, whether that’s different types of equity or stock investments, or whether that it’s moving back and forth between stocks and bonds, and more income-producing type assets and equity assets. And so it’s very important to kinda look at that as well. We talked a little bit about the tax harvesting, this is really just matching gains against losses properly, so that you can minimize how much tax you’re gonna pay or delay that tax bill into the future, and that’s something that you should be doing as well. You wanna control, we talked about the income and the deductions, which is something you do through the corporate, as well as individual structure. So if there’s expenses you can take, take those before the end of the year. If you wanna increase your income, then you can go ahead and take those into next year, which is something you can always think about. Of course, the alternative minimum tax is still out there, it’s not as brutal as it was, but you have to also do that calculation to see if you’re affected by the alternative minimum tax and if you need to make any adjustments as far as that goes.


28:16 Kurt Baker: This is the time of year where we’re doing long-term planning for our children and grandchildren. Again, you wanna make sure that you’re setting aside whatever you’ve decided for the 529 plans or long-term savings for your children, and when you do that, you have to think about the children in my opinion, individually, because each child is different, some children as they’re growing are very likely to go to college and other ones may say, I may not go to college. So you may or may not wanna put it into a 529 vehicle, you can still save the money, but just remember that once you put it into the 529 for the most part, that’s intended to be used for educational purposes, and if you decide not to use it for educational purposes, you can transfer that money between different children and grandchildren or different people, but it’s still intended to be used for educational purposes. Somebody may wanna start a business or do something totally different, that may or may not be appropriate to put into the 529 plan. There maybe better vehicles in those situations depending on the child. You wanna balance that, you wanna fund it appropriately, but you also wanna be cautious not to literally over fund it, because then you may end up with more invested in an area that is not necessarily gonna be useful at that point in time. Or you’re gonna have to pay the penalties and taxes to pull the money out and to use it for what you wanna use it for.


29:36 Kurt Baker: This is also a great time of course to talk about your long-term retirement planning and to see where you are, where are all your assets at this point in time, just kinda go down your full balance sheet, look at things like your home and your retirement accounts, your saving accounts and just see how that all fits together. And are you on track for your retirement plan. Have you fully funded things like your 401K plan? Or are you using IRAs, if you’re using IRAs have you fully funded that? Are you using any type of self-employment type plan that you wanna put into a SEP or something like that? IRA, you wanna make sure that you’re funding those appropriately. And if you are self-employed, there’s many options available to self-employed people that you should look into a little bit deeper to make sure you’re using the right strategy, especially for a small business, small owner or a sole-proprietor, there’s some different strategies that may or may not be appropriate. So you wanna make sure you look at those.


30:38 Kurt Baker: If you’re in a high tax bracket, do you wanna invest in things like municipal bonds or federally tax-exempt bonds? Those are things that you wanna take into consideration, usually that’s part of an overall strategy. Again, you wanna make sure you’ve taken any required minimum distributions that might be due. That’s critical. You don’t wanna pay the penalty, it could be extreme. Another thing you wanna do is, this is the time of giving and think about the charities that you wanna give to, the amount of money you wanna give, what you’ve budgeted for that. And I highly encourage you to check out the charities themselves. There’s a lot of fraud that goes on unfortunately in the charitable giving, the charity site where people set up fake charities. And it looks like it’s a charity, but it’s not necessarily a charity. It may have a similar name to a legitimate charity.


31:27 Kurt Baker: I recommend you go to or, those are two sites that pull data directly from the IRS database. Some of it is inputted by the the charities themselves, so you get some information from them, but things like the reporting, the IRS reporting, is pulled directly from the IRS, so you can make sure that the tax ID number is correct, you can make sure that they really are the charity they say they are, what their mission is, and how they’re stating it to the IRS. And it’s just better to check before you give, so to speak. We’ll be right back with some more thoughts about what to do in the new year.




32:09 Announcer: It’s all about how you manage your money. Now, let’s get back to learning how, from Kurt Baker, of Certified Wealth Management and Investment with Master Your Finances.




32:21 Kurt Baker: Welcome back, you’re listening to Master Your Finances. I’m Kurt Baker, a certified financial planner professional. We’re just talking about some year end stuff and things to think about for next year. As far as planning goes, this is key. And those who plan, tend to do better long term, so it is really critical to spend a little bit of time every year and there’s no better time than really the new year. We ought to have resolutions, and we all think about, “Hey, what we did last year, maybe what we can do for next year.” And it’s really just a great time to kinda think about things in general. And so, while we’re doing that, your financial life is an important aspect of that, ’cause that’s really what helps you to do a lot of the other things you really wanna do. It’s really a vehicle to help you live the life that you really wanna live. And so, we were just talking about some of the things before the break. Charitable giving is an important part of our society. And so I just wanna… Hopefully you are very generous. I know as Americans, we are very generous.


33:14 Kurt Baker: And just be sure your donations are going to a charity that you know of and you’re sure of. Check it out, if you’re not familiar with it, make sure, you’re sending it to the right place. There are places that, unfortunately, set up similar names, and it’s not a charity at all, it’s really just going to an individual that is just trying to scam the system, so to speak. Make sure you check it out through Charity Navigator or before you do so. Business owners have some flexibility as far as their planning goes, so you can control, like your retirement planning, as well as income and expenses throughout this period of time, so you make those adjustments as necessary. This is also a very good time to look at your overall estate planning. We should do this periodically. You always should do it, if there is any kind of life event change, such as a birth, death, marriage, divorce, change of job, any kinda major thing, bought a house, things like that, or sold a house. You always wanna do it then, but this is always a good time, just kinda make sure things are up-to-date and good to go. And take a look at them, make sure that you got everybody setup correctly, you’ve got all the proper documents in place that you need to have when your estate planning attorney set this up, you should have kind of a checklist of different things that you’re gonna wanna have in there. Go through it, make sure it’s all in there.


34:39 Kurt Baker: There’s some deadlines coming up here in January that you wanna be aware of. If you have any estimated taxes due, they’re gonna be due on January 15th. December 31st is also the last day to sell any securities to realize a gain or a loss, as well as December 31st is the last day to contribute to any of the retirement plans we’ve been talking about. And also, it’s the last day to make any charitable contributions for 2018. Again, if you’re gonna make the contributions to all that right now, before the end of the year. Also, you should get your W2 mailed out by the end of January, they’re due out by the January 31st. Most employees will receive those at the very, very latest, beginning of February. I’ve noticed a lot of employers like to send them out pretty early. I’ve seen them come out as early as the first week or two of the month. But bottom line is if you don’t get the W2 by the first week of February, you really need to contact your employer to make sure that it was mailed out to you.


35:41 Kurt Baker: In some cases, they’re now delivered electronically, if that’s the case, just be aware of, make sure all that is set up correctly, and that you get it. Also other types of accounts, things like 1099s, the dividends and interest statements that come out. Those also should be sent out by the end of January. If you’re not getting those documents in place by the end of January, just be aware and be proactive, and one of the easiest way to do is just look at the ones that you had last year. Most of us don’t change accounts rapidly. So just look at everything that you have from last year. See if those items have all come in, if you did change any accounts, obviously be aware of any of the new accounts that you’ve changed and just keep an eye out to make sure that those come in on time. You’re also gonna wanna put all these things together, so it makes it easy when you go see your accountant to do your returns. You wanna have your last two years’ returns available, which is ’16 and ’17. And in case now your accountant may have those, but if you change accountants, and you may wanna bring those with you, so your accountant can do the proper job in preparing your taxes correctly.


36:46 Kurt Baker: Especially, if you have a small business, or if you’ve changed jobs, or if there’s been a change in family status, like you’re married or divorced, things like that, that can impact how the returns have to be done and support that your accountant has all the backup information. Of course, the W2s, that’s important, ’cause they’ll see how all the income is received, and in some cases, you’ve got other types of income and benefits that you might get, like stock options and things like that. Restricted RSUs, I mean, there’s all kinds of different types of income, so just need to make sure all of that is being accounted for correctly, especially if you change jobs and how that transfers over, and what options you may have and things you might be required to cash in, so to speak, if you did change jobs.


37:34 Kurt Baker: You wanna make sure that you have your brokerage statements and all those come in. Again, sometimes those come in electronically, so if you have your checklist, you wanna make sure you take care of that. Another thing you should check on an annual basis is your Social Security statement, which a lot of people don’t do, and even if you’re younger you wanna go to, and if you haven’t already, you wanna set up an account there. And one of the reasons you wanna set up an account is you… Essentially you’re claiming it initially, because the IRS has your information on their side of the portal, and until you sign in with your social security number, and authenticate yourself and setup your account, it’s just sitting there.


38:13 Kurt Baker: So in theory, somebody else such as an identity thief could go in and try to set up access to your Social Security account. It is very secure. In fact, I’ve just had people like error out and have to go down to Social Security Office and prove who they were in order to get into the account. But one way to prevent somebody else from getting in is for you to get in and set up your own ID and password, in that way, at least you know you have the account and it’s going to your address and going to your email address and you can go in and check it. Once you’ve got it setup at then you wanna go in periodically and check your statements. Because the statements themselves, you wanna make sure it reflects how much income you earned last year. If you made $50,000 last year you wanna make sure that all of that got reported to the Social Security Administration, otherwise you don’t get the benefit when you retire of that income that you earned during the year. And I have seen it happen, where people had different jobs and not every employer properly reported it and some income was actually missing on the Social Security Statement. It’s rare, but it definitely happened. So you just wanna make sure that that income does get properly reported to the Social Security Administration, otherwise you’re not gonna get the benefit when you retire, and get the Social Security benefits, be aware of that.


39:30 Kurt Baker: Another thing that comes in a little bit sometimes late, although they’re required to file their returns earlier now, is statements from things like partnerships, trusts and small businesses, also known as K1 statements. Those returns are actually due a month earlier now, so it’s not as big of a problem as it used to be. But if you don’t have those by roughly the beginning of April, you really need to follow up and find out where it is. Because you should be able to get those in time nowadays in order to file your personal returns on time and that shouldn’t be an issue anymore, like it used to be. They used to be due at the same time. So what happened is, anybody that was getting these K1s would almost always have to do some type of an extension, because they may not have had all their partnership returns or trust returns in the K1s and they literally couldn’t finish the returns, they just had to make a estimation, and pay it and then do an extension and file the return later on.


40:19 Kurt Baker: Another is the mortgage interest statements, which is the 1098. You wanna make sure that you have those. You wanna do that, as well as your Real Estate tax statements, and things like that. In addition, if you have student loans, you wanna make sure you have the 1098E, which is student loan interest statements for your reporting, as well. And you wanna keep records, records, records, records. Because the IRS is much more strict about the records than they used to be, things like receipts, if you do any type of moving, the traveling receipts, they used to have… In general, if it was below $250, you didn’t need to have a receipt for it. Now, they essentially want a receipt for everything, so keep all your receipts. The good news is some of this stuff is done electronically now, so you can get receipts electronically, just save them, keep them. Or what I do is, I take any paper receipts and I just put them all in an envelope and then I worry about it later, so I know I have them all, so if I ever need them, they’re all there, and then I keep the electronic receipts, I automatically throw them into their appropriate folder, so it just makes it a lot easier, if and when you need to have all those receipts.


41:27 Kurt Baker: So the charitable receipts are important. Medical and dental expenses, you wanna keep those for the reimbursement. Educational expenses you wanna make sure to keep those. Moving expenses, as well as daycare costs and things like that. So that’s kind of a summary, I know it’s a lot, but it’s really important to keep good records, set your planning up now, so you can set the year off as best you can and make those a little bit of adjustments that you need to make and that way you’ll have a better year. And so, I wanna thank everybody again for listening to Master Your Finances. I am Kurt Baker, and will be back again next year. I hope you have a great year. Remember, together we can master your finances, so you can enjoy financial peace of mind.




42:15 Announcer: It’s hard to keep up with the fast-paced financial world, but because of Master Your Finances, you have a headstart. Thank you for listening to this week’s edition of Master Your Finances, with Kurt Baker, our certified financial planner professional only on 107.7 The Bronc, and Tune in next week, Sunday at 9:00 AM to get a boost on your financial planning. But if you missed a week, you can check our past episodes, just go to to check out episode and more. Master Your Finances is underwritten by Certified Wealth Management and Investment LLC. Money doesn’t grow on trees, but it can grow your portfolio. Thanks to Kurt Baker, and Master Your Finances. On Sundays at 9:00 AM. Exclusively on 107.7 The Bronc, and









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