The Nazarene Foundation has a new service that we have recently made available to all local churches: resources to host a Legacy Ministry Sunday. Now, you can visit our website and download all of the resources that you need to have an entire Sunday morning service on generosity, stewardship, and how your congregation can support the work of your church through planned giving.
Resources for pastors include:
- Sermon outline
- Video
- Bulletin inserts
- Devotionals
- PowerPoint presentations
To download these FREE resources or for more information, just visit www.nazarenefoundation.org/legacysunday. You can also reach us at (913) 577-2983 or info@nazarenefoundation.org if you have any questions.
Blessings,
Ken Roney
President
WASHINGTON NEWS
IRS Tax Tips for 2015 ReturnsIn FS-2016-8 the IRS outlined seven tax tips helpful for filing your 2015 tax return. There are many new provisions and changes that may affect your tax return.
1. Timing – Because April 15 is Emancipation Day in Washington, the normal deadline for most taxpayers is Monday, April 18. However, due to Patriots’ Holiday in Maine and Massachusetts, residents of those states may file until Tuesday, April 19.
2. Tax Benefits – The Protecting Americans from Tax Hikes (PATH) Act passed in December of 2015. It extended and made permanent a number of tax benefits. If you itemize deductions, you may deduct your state and local sales taxes rather than state and local income taxes. Nonbusiness energy property such as energy-efficient windows, doors, furnaces and other improvements may qualify for credits by using Form 5695. Elementary and secondary teachers who pay for classroom expenses may take an “above the line” deduction. Some tuition and fees may be deducted using Form 8917. Finally, IRA owners over age 70½ may transfer up to $100,000 from their custodian to a qualified charity and the qualified charitable distribution (QCD) will not be taxed. It is reported on IRS Form 1040, lines 15a and 15b.
3. ABLE Accounts – Donors may contribute up to the $14,000 gift tax exclusion amount each year to tax-favored ABLE accounts for people who became disabled before age 26. These accounts enable people who have a disabled family member to pay for some disability-related costs. The IRS.gov site has complete information on the “Tax Benefit for Disability” page.
4. Mileage – The mileage rates for 2015 were 57.5 cents for business miles, 23 cents for medical or moving purposes and 14 cents for charitable purpose miles. The 2016 rates have been published and will be 54 cents per mile for business, 19 cents per mile for moving or medical and 14 cents per mile for charitable purpose travel.
5. Tax ID Number – A tax ID number (usually a Social Security Number) is required to obtain the Earned Income Tax Credit, Child Tax Credit or the American Opportunity Tax Credit.
6. IRA Rollover – An IRA owner may make one withdrawal and redeposit it in a new IRA per year. This includes all of your IRAs such as a traditional or ROTH IRA. It is permitted to make unlimited trustee-to-trustee IRA transfers. Additional information may be found on IRS.gov under “Can you move retirement plan assets?” found in Publication 590-A.
7. Healthcare Changes – Taxpayers may expect to receive the new IRS Form 1095-B or Form 1095-C. These forms and other supporting information may be used to prepare yourtax return. All individuals in 2015 must either have healthcare coverage that qualifies under the Affordable Care Act (ACA), an exemption or make an “individual shared responsibility payment.”
There are major changes for you to understand in order to complete the healthcare section of your income tax return. First, most individuals with qualifying health insurance may simply check a box to show that they are in compliance. The “Qualifying Healthcare Coverage” information on IRS.gov will help you determine whether your health plan qualifies.
Second, some taxpayers qualify for an exemption from ACA. They need to complete IRS Form 8965, Health Coverage Exemptions. Some exemptions are also obtained through the healthcare.gov insurance marketplace.
Third, if you do not have qualifying coverage or an exemption, you will be required to make the “individual shared responsibility payment.” The IRS.gov site includes a helpful “calculating the payment” page.
Fourth, if you bought insurance through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement. This should arrive by early February and will enable you to reconcile your premium tax credit. Some taxpayers may be required to make an additional payment.
IRS Warns of Four “Tax Scams”
Each year the IRS publishes the “Dirty Dozen” tax scams. Four IRS letters this week warned taxpayers about various tax scams.
Phishing
A “phishing” email claims to be from the IRS. When you click on an email link, it will take you to a website created by con artists that looks like an official website. You may be asked for your name, Social Security number or other financial information. The criminals will use this information to steal your tax refund or money from your bank accounts.
IRS Commissioner Koskinen stated, “Criminals are constantly looking for new ways to trick you out of your personal financial information so be extremely cautious about opening strange emails. The IRS will not send you an email about a tax bill or refund out of the blue. We urge taxpayers not to click on any unexpected emails claiming to be from the IRS.”
Phone Scams
IRS Commissioner Koskinen stated, “Criminals are constantly looking for new ways to trick you out of your personal financial information so be extremely cautious about opening strange emails. The IRS will not send you an email about a tax bill or refund out of the blue. We urge taxpayers not to click on any unexpected emails claiming to be from the IRS.”
Phone Scams
Many taxpayers each year are victimized by phone scammers claiming to be IRS agents. They may threaten police arrest, deportation or revocation of your driver’s license. Commissioner Koskinen observes that there has been a “deluge of these aggressive phone scams.” He urges you to be cautious. Koskinen continued, “There are many variations. The caller may threaten you with arrest or court action to trick you into making a payment. Some schemes may say you are entitled to a huge refund. These all add up to trouble.”
Taxpayers should be on the lookout for fake caller ID numbers, IRS titles or badge numbers.
The IRS will never call you and demand immediate payment. It will not demand taxes without giving you an opportunity to respond. The IRS will not require specific payment methods such as a prepaid debit card or credit card. It also will not threaten you with arrest by your local police department.
Return Preparer Fraud
Taxpayers should be on the lookout for fake caller ID numbers, IRS titles or badge numbers.
The IRS will never call you and demand immediate payment. It will not demand taxes without giving you an opportunity to respond. The IRS will not require specific payment methods such as a prepaid debit card or credit card. It also will not threaten you with arrest by your local police department.
Return Preparer Fraud
Over 60% of Americans use a paid tax preparer each year. Most of the tax preparers are honest and hardworking persons who provide excellent service. Koskinen warned, “Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected. Most preparers provide high-quality service but we run across cases each year where unscrupulous preparers steal from their clients and misfile their taxes.”
There are five recommendations to ensure you are working with a qualified and capable preparer.
1. PTIN – Your preparer should have the IRS Preparer Tax Identification Number (PTIN). Preparers must include that on your filed tax return.
2. Qualifications – Your paid preparer may have professional qualifications as an attorney, CPA, enrolled agent or other professional. He or she should be willing to disclose those qualifications before your return is completed.
3. Service Fees – A preparer is not permitted to receive a percentage of the refund. You also should make sure that the refund goes to your account and not that of your tax preparer.
4. eFiling – The best and safest method is for your tax preparer to eFile your return. There have been over 1.5 billion eFiled returns since 2000.
5. Signing – Never sign a blank return. Review your entire return before it is signed and filed. Ask questions of your preparer if you are uncertain about any information or entries on your tax return.
Identity Theft
There are five recommendations to ensure you are working with a qualified and capable preparer.
1. PTIN – Your preparer should have the IRS Preparer Tax Identification Number (PTIN). Preparers must include that on your filed tax return.
2. Qualifications – Your paid preparer may have professional qualifications as an attorney, CPA, enrolled agent or other professional. He or she should be willing to disclose those qualifications before your return is completed.
3. Service Fees – A preparer is not permitted to receive a percentage of the refund. You also should make sure that the refund goes to your account and not that of your tax preparer.
4. eFiling – The best and safest method is for your tax preparer to eFile your return. There have been over 1.5 billion eFiled returns since 2000.
5. Signing – Never sign a blank return. Review your entire return before it is signed and filed. Ask questions of your preparer if you are uncertain about any information or entries on your tax return.
Identity Theft
During the past year, the IRS conducted a “Security Summit Initiative” to work with states and individual tax preparers in the effort to combat identity theft. Koskinen reports, “Our collaborations with the Security Summit have given the IRS additional tools to stop fraudulent returns at the door. The criminals will continue to look for increasingly sophisticated ways to breach the tax system. While the IRS has improved prevention and detection efforts, we are calling on taxpayers to protect their private information so thieves can’t steal personal data to file fraudulent returns.”
The best protection to preclude theft of your tax refund is to keep your computers secure and only give out your Social Security number when necessary.
The IRS has aggressively pursued tax refund thieves. During the past three years, over 2,000 persons have been convicted of identity theft of tax refunds. The average sentence for these persons has been 38 months in federal prison.
For further information, search www.IRS.gov for “Identity Theft.”
The best protection to preclude theft of your tax refund is to keep your computers secure and only give out your Social Security number when necessary.
The IRS has aggressively pursued tax refund thieves. During the past three years, over 2,000 persons have been convicted of identity theft of tax refunds. The average sentence for these persons has been 38 months in federal prison.
For further information, search www.IRS.gov for “Identity Theft.”
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PERSONAL PLANNER
Life Insurance - Costs and BenefitsLet's look at the "top five" reasons people give for not owning life insurance.
1. Too Expensive. "I just cannot afford life insurance right now."
2. Confusing. "We looked at proposals from three companies—page after page of numbers. What does it all mean? I haven't the slightest idea!"
3. Too Many Types. "I checked into term insurance, whole life insurance, universal life, variable life, single premium, and survivorship insurance. But which one is right for me?"
4. No Trust. "Those big insurance companies claim to have billions of reserve funds. But one of the biggest insurance companies has been on the ropes for months. Who can you trust?"
5. Don't Plan to Die. "Someday when I plan to die, I will consider life insurance. But for now—don't worry, be happy!"
Five Reasons to Own Life InsuranceThere are several reasons for you to purchase life insurance. If you were to pass away, the life insurance death benefits could provide resources that are quite important to your family. The various benefits include payment of your funeral and final expenses, paying off mortgages or other debts, living expenses or income for a surviving spouse, inheritance for children and payment of estate taxes.
1. Final Expenses and Funeral Costs. Usually there are medical expenses during the last weeks of life. These frequently will range from $5,000 to $10,000. Your memorial service preparation and costs can also easily exceed $10,000. Total final expenses can often be more than $20,000.
2. Pay Debts and Mortgages. The payment of debts or a mortgage is a one-time expense. Depending upon the amount of your mortgage, this could cost anywhere from a few thousand dollars to many hundreds of thousands of dollars.
3. Living Expenses for Spouse. The largest amount of insurance is typically purchased to provide both economic security and an investment that will add to the spouse's other annual income. A reasonable method is to estimate a 5% return on the investment. For example, if a spouse needed another $25,000 of income over and above the amount paid by retirement funds, Social Security and other earnings, then insurance equal to $500,000 invested at 5% would produce this amount.
4. Inheritance for Children. Permanent insurance is frequently used as a method of providing an inheritance for children. Many parents who make substantial gifts to charity plan to use life insurance as a means of providing additional inheritance for children or other family members.
5. Estate Taxes. If your estate is large, there may be a substantial payment of federal or state estate tax. If you own a family business or other assets that are intended to be transferred to family, then your estate could be subject to estate tax. Life insurance can be an excellent method to provide funds for payment of estate tax. Normally, for larger estates the life insurance is owned by an irrevocable life insurance trust so the insurance itself is not subject to estate tax.
Determining the Life Insurance AmountA fairly simple way for you to determine the total amount of needed insurance is to add up your one-time expenses, then calculate the amount of insurance invested at 5% necessary to benefit a surviving spouse, children or other family members. For example, if your one-time expenses are $200,000 and your spouse desires additional income of $25,000, then the total insurance would be $700,000. This amount includes $200,000 for expenses and $500,000 invested at 5% to produce the annual income.
More sophisticated calculations are available online. Use your favorite search site to look for "life insurance needs calculator," and select from the available free public calculators.
How Life Insurance WorksLife insurance started because individuals were concerned that they might pass away and not provide sufficient resources for family. Because young families typically need a substantial fund and lack the ability to save enough in a short period of time, the concept of life insurance was created.
If many thousands of individuals pay premiums and those funds are invested, then a pool of funds will be available to compensate individuals. The life insurance company hires actuaries who determine the probable number of individuals who will pass away in a given year. Especially for younger persons, out of a pool of 100,000 only a few will pass away in a given year. As a result, the insurance company is able to receive all the premiums and invest them in the insurance reserve fund. The earnings and a portion of the funds are distributed each year to pay claims for those who pass away.
The insurance funds are primarily invested in bonds. The insurance company generally receives 1% to 1.2% to cover all of their overhead and costs. The balance is returned through insurance proceeds to beneficiaries.
Life Insurance Policy CategoriesInsurance is generally divided into two categories—term insurance and permanent insurance.
Term InsuranceTerm insurance is the least expensive type of insurance and is favored by younger people and many financial planners. The term insurance is available with an annual renewable term (ART) or with a fixed payment for five years, 10 years, 15 years or longer.
Because term insurance does not include any investment or cash value, it enables the largest potential policy to be purchased for the least cost. Due to intense competition within the insurance industry, prices on term policies and level-pay term policies have moved lower in recent years.
Some types of term policies also include the ability to convert to whole life or universal life at a future time. If the conversion is elected, then there will be a substantial increase in the premium.
Permanent InsurancePermanent insurance includes several types. The traditional favorite is whole life insurance, but there are also universal life, variable life and survivorship life insurance.
Whole Life. The traditional whole life policy involves both insurance and a cash value. The premiums are substantially higher than term insurance because the policy will build a savings element or cash value. During the first year, much of the cash value may be used by the insurance company to cover the commission payment to the sales representative, but over time the cash value may increase. The owner of the policy has the right to borrow against the cash value at favorable rates.
Whole life is frequently fixed in terms of premiums paid and death benefit. The insurance company is determining the probable return of its reserve fund and, based on the age and health of the insured person, calculates and commits to a fixed benefit in exchange for a certain premium.
Universal Life. Universal life was created to provide an option for people who would consider purchasing term insurance and invest an additional amount in mutual funds. With universal life, the policy is invested and a cash reserve is built up. The insurance reserve growth covers the cost of the insurance policy. Universal life policies may include flexible options for increasing or decreasing premium payments. Of course, the cash value of the policy will change with a modification of the premium schedule.
Variable Universal Life. If the insured desires to own life insurance but also potentially gain from investments in stocks and bonds, a variable policy may be appropriate. With a variable policy the insured typically is permitted to invest in different mutual funds managed by the financial services company. If the mutual funds increase in value, the policy cash value will increase.
Survivorship Life. For a couple, an attractive option is to purchase a survivorship policy. This policy pays a death benefit after both husband and wife pass away. Because two persons are insured, it frequently is possible to obtain insurance even if one spouse is in poor health. Quite often, this insurance can be purchased at a more reasonable premium because two persons must pass away before the death benefit is paid. It is particularly useful for providing funds to pay for taxes if a business is to be transferred from parents to children after they both pass away.
Life Insurance BeneficiariesIn most estates, life insurance does not pass through the probate process. The insurance policy is a contract between the insured and the insurance company. The person who purchases the insurance has the right to name the beneficiaries. Normally, a primary and a secondary beneficiary are named. It's also possible to divide the insurance policy among several children or other beneficiaries.
A common beneficiary designation is for the spouse to be a primary beneficiary and the children to be the contingent beneficiaries with equal shares. If the spouse were to predecease the insured or they were to pass away in a common accident, then the children would receive the insurance proceeds.
Minor children should usually not be the beneficiaries of a policy. In many states, if a minor child receives a substantial inheritance, a conservator must be appointed to manage the assets. This is quite expensive and also has the disadvantage of transferring the assets to the minor child when he or she becomes an adult.
A much better arrangement is to transfer the policy to a living trust for the benefit of the minor children, or to create a trust and a will for the benefit of the minor children and transfer the policy to the estate to fund that trust.
Prudent Purchase of InsuranceLife insurance is an important decision, and it is helpful to learn about the different types of insurance. Most individuals will also visit with a chartered life underwriter (CLU) or other representative of a financial services company.
The representative can conduct an insurance needs analysis and suggest the appropriate type of insurance. It is helpful for you to do sufficient research to understand the reasons why many individuals choose term insurance or permanent insurance. In addition, the use of online calculators to determine insurance funding will also provide you with a better understanding of the appropriate amount of insurance. The amount of insurance recommended by online calculators can vary greatly, so understanding your probable needs is quite important.
Insurance Company RatingsInsurance companies are rated by several sources. A.M. Best, Weiss, Moody's and other ratings services are available. You should be certain to ask for the ratings of any company if a representative suggests purchasing a policy from them. It is also easy to go online and do a search for "insurance company ratings" and obtain the actual ratings for most financial services companies.
PERSONAL PLANNER
Life Insurance - Costs and BenefitsLet's look at the "top five" reasons people give for not owning life insurance.
1. Too Expensive. "I just cannot afford life insurance right now."
2. Confusing. "We looked at proposals from three companies—page after page of numbers. What does it all mean? I haven't the slightest idea!"
3. Too Many Types. "I checked into term insurance, whole life insurance, universal life, variable life, single premium, and survivorship insurance. But which one is right for me?"
4. No Trust. "Those big insurance companies claim to have billions of reserve funds. But one of the biggest insurance companies has been on the ropes for months. Who can you trust?"
5. Don't Plan to Die. "Someday when I plan to die, I will consider life insurance. But for now—don't worry, be happy!"
Five Reasons to Own Life InsuranceThere are several reasons for you to purchase life insurance. If you were to pass away, the life insurance death benefits could provide resources that are quite important to your family. The various benefits include payment of your funeral and final expenses, paying off mortgages or other debts, living expenses or income for a surviving spouse, inheritance for children and payment of estate taxes.
1. Final Expenses and Funeral Costs. Usually there are medical expenses during the last weeks of life. These frequently will range from $5,000 to $10,000. Your memorial service preparation and costs can also easily exceed $10,000. Total final expenses can often be more than $20,000.
2. Pay Debts and Mortgages. The payment of debts or a mortgage is a one-time expense. Depending upon the amount of your mortgage, this could cost anywhere from a few thousand dollars to many hundreds of thousands of dollars.
3. Living Expenses for Spouse. The largest amount of insurance is typically purchased to provide both economic security and an investment that will add to the spouse's other annual income. A reasonable method is to estimate a 5% return on the investment. For example, if a spouse needed another $25,000 of income over and above the amount paid by retirement funds, Social Security and other earnings, then insurance equal to $500,000 invested at 5% would produce this amount.
4. Inheritance for Children. Permanent insurance is frequently used as a method of providing an inheritance for children. Many parents who make substantial gifts to charity plan to use life insurance as a means of providing additional inheritance for children or other family members.
5. Estate Taxes. If your estate is large, there may be a substantial payment of federal or state estate tax. If you own a family business or other assets that are intended to be transferred to family, then your estate could be subject to estate tax. Life insurance can be an excellent method to provide funds for payment of estate tax. Normally, for larger estates the life insurance is owned by an irrevocable life insurance trust so the insurance itself is not subject to estate tax.
Determining the Life Insurance AmountA fairly simple way for you to determine the total amount of needed insurance is to add up your one-time expenses, then calculate the amount of insurance invested at 5% necessary to benefit a surviving spouse, children or other family members. For example, if your one-time expenses are $200,000 and your spouse desires additional income of $25,000, then the total insurance would be $700,000. This amount includes $200,000 for expenses and $500,000 invested at 5% to produce the annual income.
More sophisticated calculations are available online. Use your favorite search site to look for "life insurance needs calculator," and select from the available free public calculators.
How Life Insurance WorksLife insurance started because individuals were concerned that they might pass away and not provide sufficient resources for family. Because young families typically need a substantial fund and lack the ability to save enough in a short period of time, the concept of life insurance was created.
If many thousands of individuals pay premiums and those funds are invested, then a pool of funds will be available to compensate individuals. The life insurance company hires actuaries who determine the probable number of individuals who will pass away in a given year. Especially for younger persons, out of a pool of 100,000 only a few will pass away in a given year. As a result, the insurance company is able to receive all the premiums and invest them in the insurance reserve fund. The earnings and a portion of the funds are distributed each year to pay claims for those who pass away.
The insurance funds are primarily invested in bonds. The insurance company generally receives 1% to 1.2% to cover all of their overhead and costs. The balance is returned through insurance proceeds to beneficiaries.
Life Insurance Policy CategoriesInsurance is generally divided into two categories—term insurance and permanent insurance.
Term InsuranceTerm insurance is the least expensive type of insurance and is favored by younger people and many financial planners. The term insurance is available with an annual renewable term (ART) or with a fixed payment for five years, 10 years, 15 years or longer.
Because term insurance does not include any investment or cash value, it enables the largest potential policy to be purchased for the least cost. Due to intense competition within the insurance industry, prices on term policies and level-pay term policies have moved lower in recent years.
Some types of term policies also include the ability to convert to whole life or universal life at a future time. If the conversion is elected, then there will be a substantial increase in the premium.
Permanent InsurancePermanent insurance includes several types. The traditional favorite is whole life insurance, but there are also universal life, variable life and survivorship life insurance.
Whole Life. The traditional whole life policy involves both insurance and a cash value. The premiums are substantially higher than term insurance because the policy will build a savings element or cash value. During the first year, much of the cash value may be used by the insurance company to cover the commission payment to the sales representative, but over time the cash value may increase. The owner of the policy has the right to borrow against the cash value at favorable rates.
Whole life is frequently fixed in terms of premiums paid and death benefit. The insurance company is determining the probable return of its reserve fund and, based on the age and health of the insured person, calculates and commits to a fixed benefit in exchange for a certain premium.
Universal Life. Universal life was created to provide an option for people who would consider purchasing term insurance and invest an additional amount in mutual funds. With universal life, the policy is invested and a cash reserve is built up. The insurance reserve growth covers the cost of the insurance policy. Universal life policies may include flexible options for increasing or decreasing premium payments. Of course, the cash value of the policy will change with a modification of the premium schedule.
Variable Universal Life. If the insured desires to own life insurance but also potentially gain from investments in stocks and bonds, a variable policy may be appropriate. With a variable policy the insured typically is permitted to invest in different mutual funds managed by the financial services company. If the mutual funds increase in value, the policy cash value will increase.
Survivorship Life. For a couple, an attractive option is to purchase a survivorship policy. This policy pays a death benefit after both husband and wife pass away. Because two persons are insured, it frequently is possible to obtain insurance even if one spouse is in poor health. Quite often, this insurance can be purchased at a more reasonable premium because two persons must pass away before the death benefit is paid. It is particularly useful for providing funds to pay for taxes if a business is to be transferred from parents to children after they both pass away.
Life Insurance BeneficiariesIn most estates, life insurance does not pass through the probate process. The insurance policy is a contract between the insured and the insurance company. The person who purchases the insurance has the right to name the beneficiaries. Normally, a primary and a secondary beneficiary are named. It's also possible to divide the insurance policy among several children or other beneficiaries.
A common beneficiary designation is for the spouse to be a primary beneficiary and the children to be the contingent beneficiaries with equal shares. If the spouse were to predecease the insured or they were to pass away in a common accident, then the children would receive the insurance proceeds.
Minor children should usually not be the beneficiaries of a policy. In many states, if a minor child receives a substantial inheritance, a conservator must be appointed to manage the assets. This is quite expensive and also has the disadvantage of transferring the assets to the minor child when he or she becomes an adult.
A much better arrangement is to transfer the policy to a living trust for the benefit of the minor children, or to create a trust and a will for the benefit of the minor children and transfer the policy to the estate to fund that trust.
Prudent Purchase of InsuranceLife insurance is an important decision, and it is helpful to learn about the different types of insurance. Most individuals will also visit with a chartered life underwriter (CLU) or other representative of a financial services company.
The representative can conduct an insurance needs analysis and suggest the appropriate type of insurance. It is helpful for you to do sufficient research to understand the reasons why many individuals choose term insurance or permanent insurance. In addition, the use of online calculators to determine insurance funding will also provide you with a better understanding of the appropriate amount of insurance. The amount of insurance recommended by online calculators can vary greatly, so understanding your probable needs is quite important.
Insurance Company RatingsInsurance companies are rated by several sources. A.M. Best, Weiss, Moody's and other ratings services are available. You should be certain to ask for the ratings of any company if a representative suggests purchasing a policy from them. It is also easy to go online and do a search for "insurance company ratings" and obtain the actual ratings for most financial services companies.
Read More
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SAVVY LIVING
Financial Paperwork: What to Keep, What to TossHow long should a person hang on to old receipts, stock records, tax returns and other financial documents? I have accumulated boxes full of such papers over the years and would like to get rid of some of it now that I'm retired.
This is a great time of the year to get rid of unnecessary or outdated paperwork and to organize your records in preparation for filing your tax return in the spring. Here's a checklist of what to keep and what to toss out, along with some tips to help you reduce your future paper accumulation.
Toss Out
You can also reduce your future paper load by switching to electronic statements and records whenever possible.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
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SAVVY LIVING
Financial Paperwork: What to Keep, What to TossHow long should a person hang on to old receipts, stock records, tax returns and other financial documents? I have accumulated boxes full of such papers over the years and would like to get rid of some of it now that I'm retired.
This is a great time of the year to get rid of unnecessary or outdated paperwork and to organize your records in preparation for filing your tax return in the spring. Here's a checklist of what to keep and what to toss out, along with some tips to help you reduce your future paper accumulation.
Toss Out
- ATM receipts and bank-deposit slips as soon as you match them up with your monthly statement.
- Credit card receipts after you get your statement, unless you might return the item or need proof of purchase for a warranty.
- Credit card statements that do not have a tax-related expense on them.
- Utility bills when the following month's bill arrives showing that your prior payment was received. If you wish to track utility usage over time, you may want to keep them for a year, or if you deduct a home office on your taxes keep them for seven years.
- To avoid identity theft, be sure you shred anything you throw away that contains your personal information. It's best to use a crosscut shredder rather than a strip one, which leaves long paper bands that could be reassembled.
- Paycheck stubs until you get your W-2 in January to check its accuracy.
- Bank statements (savings and checking account) to confirm your 1099s.
- Brokerage, 401(k), IRA and other investment statements until you get your annual summary (keep longer for tax purposes if they show a gain or loss).
- Receipts for health care bills in case you qualify for a medical deduction.
- Supporting documents for your taxes, including W-2s, 1099s, and receipts or canceled checks that substantiate deductions. The IRS usually has up to three years after you file to audit you but may look back up to six years if it suspects you substantially underreported income or committed fraud.
- Tax returns with proof of filing and payment. You should keep these for at least seven years, but many experts recommend you keep them forever because they provide a record of your financial history.
- IRS forms that you filed when making nondeductible contributions to a traditional IRA or a Roth conversion.
- Receipts for capital improvements that you've made to your home until seven years after you sell the house.
- Retirement and brokerage account annual statements as long as you hold those investments.
- Defined-benefit pension plan documents.
- Savings bonds until redeemed.
- Loan documents until the loan is paid off.
- Vehicle titles and registration information as long as you own the car, boat, truck, or other vehicle.
- Insurance policies as long as you have them.
- Warranties or receipts for big-ticket purchases for as long as you own the item, to support warranty and insurance claims.
- Personal and family records like birth certificates, marriage license, divorce papers,Social Security cards, military discharge papers and estate-planning documents (power of attorney, will, trust and advanced directive). Keep these in a fireproof safe or safe-deposit box.
You can also reduce your future paper load by switching to electronic statements and records whenever possible.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living” book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization’s official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
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YOUR PLAN
Heroes of generosity don't always have big bank accounts. For years, John Pierson drove a milk route and worked long hours. But he and his wife, Orlene, found time and energy to maintain their church facilities, call on those who were sick and homebound, and make a bold lead pledge in the capital campaign to build a new church facility.
It is as if the spirit of generosity was ingrained in the Piersons. One holiday morning their pastor, after bringing his wife home from the hospital to recuperate after major surgery, found John and Orlene waiting at his home with dinner. What a moving and appropriate gift of love for that clergy family.
John and Orlene were Nazarene Legacy Partners, modern day heroes who made a difference in advancing God's Kingdom. In the later stages of their lives, a member of the Nazarene Foundation staff visited the Piersons in their assisted living facility and was moved to tears as John tenderly cared for his wife who was in the late stages of Alzheimer's disease. Just a few weeks later, Orlene died.
Not long after this at 95 years old, John was playing his violin, sharing beautiful music with other senior adults. As he concluded the last chorus of "To God Be the Glory" where the lyrics state: "O come to the Father, thro" Jesus, the Son," this dear saint slumped over witha heart attack and died. One of his caregivers, who often tried to keep up with John on his afternoon strolls, said, "This was John's good-bye party."
Through the Piersons' Charitable Trust and Charitable Gift Annuities, the Church of the Nazarene Foundation was privileged to make significant distributions to the local church John and Orlene attended as well as to other Nazarene ministries that were near to the hearts of the Piersons.
Faithful people, such as the Piersons, who have modeled generous living and Christlike service, give us cause to offer thanks as Paul did when he wrote his letter to the Romans.
Learn more about the many planned giving services the Foundation offers and how to leave a legacy gift to the ministries you love, contact the Church of the Nazarene Foundation and we will be happy to assist you.
Note: This is one in a series of articles for "Modeling Generosity" a series where Holiness Today partners with the Church of the Nazarene Foundation and other entities. Learn how God's people model generosity in their lives. Help inspire others to leave a lasting legacy by sending your stories, or the story of someone you know who lives generously, toinfo@nazarenefoundation.org.
YOUR PLAN
Heroes of generosity don't always have big bank accounts. For years, John Pierson drove a milk route and worked long hours. But he and his wife, Orlene, found time and energy to maintain their church facilities, call on those who were sick and homebound, and make a bold lead pledge in the capital campaign to build a new church facility.
It is as if the spirit of generosity was ingrained in the Piersons. One holiday morning their pastor, after bringing his wife home from the hospital to recuperate after major surgery, found John and Orlene waiting at his home with dinner. What a moving and appropriate gift of love for that clergy family.
John and Orlene were Nazarene Legacy Partners, modern day heroes who made a difference in advancing God's Kingdom. In the later stages of their lives, a member of the Nazarene Foundation staff visited the Piersons in their assisted living facility and was moved to tears as John tenderly cared for his wife who was in the late stages of Alzheimer's disease. Just a few weeks later, Orlene died.
Not long after this at 95 years old, John was playing his violin, sharing beautiful music with other senior adults. As he concluded the last chorus of "To God Be the Glory" where the lyrics state: "O come to the Father, thro" Jesus, the Son," this dear saint slumped over witha heart attack and died. One of his caregivers, who often tried to keep up with John on his afternoon strolls, said, "This was John's good-bye party."
Through the Piersons' Charitable Trust and Charitable Gift Annuities, the Church of the Nazarene Foundation was privileged to make significant distributions to the local church John and Orlene attended as well as to other Nazarene ministries that were near to the hearts of the Piersons.
Faithful people, such as the Piersons, who have modeled generous living and Christlike service, give us cause to offer thanks as Paul did when he wrote his letter to the Romans.
Learn more about the many planned giving services the Foundation offers and how to leave a legacy gift to the ministries you love, contact the Church of the Nazarene Foundation and we will be happy to assist you.
Note: This is one in a series of articles for "Modeling Generosity" a series where Holiness Today partners with the Church of the Nazarene Foundation and other entities. Learn how God's people model generosity in their lives. Help inspire others to leave a lasting legacy by sending your stories, or the story of someone you know who lives generously, toinfo@nazarenefoundation.org.
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FINANCES
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FINANCES
Stocks - Alphabet's Earnings Spell Success
Alphabet's Earnings Spell SuccessAlphabet Inc. (GOOG), Google's parent company, reported its fourth quarter results on Monday, February 1. The tech giant surpassed analysts' expectations as ad revenue ignited sales.
Alphabet reported quarterly revenue of $21.33 billion. This is an increase of 18% from last year.
"Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we've been investing for many years," said Ruth Porat, CFO of Alphabet. "We're excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people,"
Net income for the quarter was $4.92 billion. Last year, the company's fourth quarter net income was $4.67 billion.
A great deal of Alphabet's success can be attributed to Google's advertising business. Revenue from advertising alone was $19.08 billion, making up 88% of the company's total quarterly revenue. In after-hours trading on Monday, Alphabet's shares rose more than 8%, briefly overtaking Apple as the world's most valuable company. However, Apple took back the crown at Wednesday's closing when its market cap was reported at $534 billion, while Alphabet's cap came in around $515 billion.
Alphabet Inc. (GOOG) shares ended the week at $683.55 down 10% for the week.
ExxonMobil's Earnings PlungeExxonMobil Corporation (XOM) released its full-year and fourth quarter earnings on Tuesday, February 2. The company reported a substantial drop in earnings, as low oil prices pushed profits 50% lower than they were a year ago.
Exxon announced full-year revenue of $268.88 billion, starkly lower than last year's reported revenue of $360.31 billion. Fourth quarter revenue totaled $59.81 billion, down from the company's year ago quarterly revenue of $87.28 billion.
"While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management," said CEO Rex W. Tillerson. "The scale and diversity of our cash flows, along with our financial strength, provide us with the confidence to invest through the cycle to create long-term shareholder value."
Exxon reported full-year net income of $16.15 billion, significantly lower than the previous year's earnings of $32.52 billion. The company's quarterly net income was $2.78 billion, a 58% drop from the year-earlier quarter.
With crude prices around $30 a barrel, Exxon's sharply lower earnings are a testament to the hurting oil and gas economy. Oil prices have dropped 70% since June 2014, forcing oil companies to take measures to preserve capital. Exxon is no exception. The company announced on Tuesday that it will be cutting capital spending by 25% and suspending its share buyback program. However, unlike its rivals BP and Chevron that announced they will be laying-off upwards of 4,000 workers, Exxon has avoided mass layoffs and plans to start six new projects this year.
ExxonMobil Corporation (XOM) shares ended the week at $80.08 up 4% for the week.
Yahoo Reports Earnings and LayoffsYahoo! Inc. (YHOO) reported its full year and quarterly earnings on Tuesday, February 2. Overall, the company's results were aligned with analysts' expectations.
The company's full year revenue was $4.97 billion, compared to $4.67 billion in the year prior. Quarterly revenue was reported at $1.27 billion, slightly lower than last year's fourth quarter revenue of $1.25 billion.
"I'm pleased to report that our Q4 performance exceeded guidance across GAAP revenue, revenue ex-TAC, adjusted EBITDA, and non-GAAP Operating Income," said Marissa Mayer, CEO of Yahoo. "We are extremely proud of the billion dollar plus business we have built in mobile, video, native and social."
Yahoo's full year net earnings were down significantly, as it reported earnings of $4.36 billion compared to $7.52 billion the previous year. On a per share basis, this quarter's earnings were 13 cents a share. Last year, Yahoo earned 30 cents a share in the fourth quarter.
The earnings report came on the tail-end of Mayer's unveiling of Yahoo's strategic plan to simplify the company and narrow its focus. Part of this plan involves a trim down in size. Mayer announced that Yahoo plans to lay off 15% of its 11,000 employees and close five offices. In addition, the company aims to cut its operating expenses by more than $400 million by the year's end in order to accelerate its growth in 2017.
Yahoo! Inc. (YHOO) shares ended the week at $27.97 down 5% for the week.
The Dow started the week of 2/1 at 16,454 and closed at 16,205 on 2/5. The S&P 500 started the week at 1,937 and closed at 1,880. The NASDAQ started the week at 4,588 and closed at 4,363.
Alphabet's Earnings Spell SuccessAlphabet Inc. (GOOG), Google's parent company, reported its fourth quarter results on Monday, February 1. The tech giant surpassed analysts' expectations as ad revenue ignited sales.
Alphabet reported quarterly revenue of $21.33 billion. This is an increase of 18% from last year.
"Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we've been investing for many years," said Ruth Porat, CFO of Alphabet. "We're excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people,"
Net income for the quarter was $4.92 billion. Last year, the company's fourth quarter net income was $4.67 billion.
A great deal of Alphabet's success can be attributed to Google's advertising business. Revenue from advertising alone was $19.08 billion, making up 88% of the company's total quarterly revenue. In after-hours trading on Monday, Alphabet's shares rose more than 8%, briefly overtaking Apple as the world's most valuable company. However, Apple took back the crown at Wednesday's closing when its market cap was reported at $534 billion, while Alphabet's cap came in around $515 billion.
Alphabet Inc. (GOOG) shares ended the week at $683.55 down 10% for the week.
ExxonMobil's Earnings PlungeExxonMobil Corporation (XOM) released its full-year and fourth quarter earnings on Tuesday, February 2. The company reported a substantial drop in earnings, as low oil prices pushed profits 50% lower than they were a year ago.
Exxon announced full-year revenue of $268.88 billion, starkly lower than last year's reported revenue of $360.31 billion. Fourth quarter revenue totaled $59.81 billion, down from the company's year ago quarterly revenue of $87.28 billion.
"While our financial results reflect the challenging environment, we remain focused on the business fundamentals, including project execution and effective cost management," said CEO Rex W. Tillerson. "The scale and diversity of our cash flows, along with our financial strength, provide us with the confidence to invest through the cycle to create long-term shareholder value."
Exxon reported full-year net income of $16.15 billion, significantly lower than the previous year's earnings of $32.52 billion. The company's quarterly net income was $2.78 billion, a 58% drop from the year-earlier quarter.
With crude prices around $30 a barrel, Exxon's sharply lower earnings are a testament to the hurting oil and gas economy. Oil prices have dropped 70% since June 2014, forcing oil companies to take measures to preserve capital. Exxon is no exception. The company announced on Tuesday that it will be cutting capital spending by 25% and suspending its share buyback program. However, unlike its rivals BP and Chevron that announced they will be laying-off upwards of 4,000 workers, Exxon has avoided mass layoffs and plans to start six new projects this year.
ExxonMobil Corporation (XOM) shares ended the week at $80.08 up 4% for the week.
Yahoo Reports Earnings and LayoffsYahoo! Inc. (YHOO) reported its full year and quarterly earnings on Tuesday, February 2. Overall, the company's results were aligned with analysts' expectations.
The company's full year revenue was $4.97 billion, compared to $4.67 billion in the year prior. Quarterly revenue was reported at $1.27 billion, slightly lower than last year's fourth quarter revenue of $1.25 billion.
"I'm pleased to report that our Q4 performance exceeded guidance across GAAP revenue, revenue ex-TAC, adjusted EBITDA, and non-GAAP Operating Income," said Marissa Mayer, CEO of Yahoo. "We are extremely proud of the billion dollar plus business we have built in mobile, video, native and social."
Yahoo's full year net earnings were down significantly, as it reported earnings of $4.36 billion compared to $7.52 billion the previous year. On a per share basis, this quarter's earnings were 13 cents a share. Last year, Yahoo earned 30 cents a share in the fourth quarter.
The earnings report came on the tail-end of Mayer's unveiling of Yahoo's strategic plan to simplify the company and narrow its focus. Part of this plan involves a trim down in size. Mayer announced that Yahoo plans to lay off 15% of its 11,000 employees and close five offices. In addition, the company aims to cut its operating expenses by more than $400 million by the year's end in order to accelerate its growth in 2017.
Yahoo! Inc. (YHOO) shares ended the week at $27.97 down 5% for the week.
The Dow started the week of 2/1 at 16,454 and closed at 16,205 on 2/5. The S&P 500 started the week at 1,937 and closed at 1,880. The NASDAQ started the week at 4,588 and closed at 4,363.
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Bonds - Yields Rise Then Fall With New Job Report
Bonds - Yields Rise Then Fall With New Job Report
Treasury yields rose on Friday morning following the release of the government's latest job report, but spiraled downward as the day wore on as investors adapted a more negative view of the job report.
The employment report revealed that job growth fell below expectations with only 151,000 jobs added. However, investors initially were optimistic as the report indicated that the unemployment rate fell from 5.0% to 4.9%, making January the first month since February 2008 that the employment rate has dropped below 5.0%.
At first, the jobs report had the effect of easing the concerns of some investors who have been flocking to Treasury bonds due to plummeting oil prices and weakness in China. Following the announcement, the yield on the 10-year Treasury note rose to 1.89% compared to 1.84% prior to the announcement.
"The headline number was a bit of a disappointment but not too bad, and the rest of the report suggests steady improvement," said Michael Hanson, a senior economist at Bank of America Merrill Lynch. "The financial markets are leery, but the labor market still looks like it's continuing to grow."
However, as the day continued, investors and analysts scrutinized the employment report, causing stock prices to fall and the demand for safer assets, like bonds, to rise. By the end of the day on Friday, the yield on the 10-year Treasury note had dropped nine basis points from the start of the week and reached its lowest level since April of last year.
"It's a rather difficult report to interpret. It confirms there has been some deceleration in the U.S. economy. We're not falling off the cliff, but it clearly shows the U.S. economy is not immune to the global slowdown," said Russ Koesterich, global market strategist with asset manager BlackRock.
The 10-year Treasury note yield finished the week of 2/1 at 1.84% while the 30-year Treasury note yield was 2.67%.
The employment report revealed that job growth fell below expectations with only 151,000 jobs added. However, investors initially were optimistic as the report indicated that the unemployment rate fell from 5.0% to 4.9%, making January the first month since February 2008 that the employment rate has dropped below 5.0%.
At first, the jobs report had the effect of easing the concerns of some investors who have been flocking to Treasury bonds due to plummeting oil prices and weakness in China. Following the announcement, the yield on the 10-year Treasury note rose to 1.89% compared to 1.84% prior to the announcement.
"The headline number was a bit of a disappointment but not too bad, and the rest of the report suggests steady improvement," said Michael Hanson, a senior economist at Bank of America Merrill Lynch. "The financial markets are leery, but the labor market still looks like it's continuing to grow."
However, as the day continued, investors and analysts scrutinized the employment report, causing stock prices to fall and the demand for safer assets, like bonds, to rise. By the end of the day on Friday, the yield on the 10-year Treasury note had dropped nine basis points from the start of the week and reached its lowest level since April of last year.
"It's a rather difficult report to interpret. It confirms there has been some deceleration in the U.S. economy. We're not falling off the cliff, but it clearly shows the U.S. economy is not immune to the global slowdown," said Russ Koesterich, global market strategist with asset manager BlackRock.
The 10-year Treasury note yield finished the week of 2/1 at 1.84% while the 30-year Treasury note yield was 2.67%.
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CDs and Mortgages - Five Week Fall - Interest Rates Keep Tumbling
CDs and Mortgages - Five Week Fall - Interest Rates Keep Tumbling
Freddie Mac released its latest Primary Mortgage Market Survey (PMMS) on Thursday, February 4. The report showed interest rates falling for the fifth straight week.
The 30-year fixed rate mortgage averaged 3.72% this week. This represents a decrease from last week when it averaged 3.79%. Last year at this time, the 30-year fixed rate mortgage averaged 3.59%.
This week, the 15-year fixed rate mortgage averaged 3.01%. This was down from last week when it averaged 3.07%. The 15-year fixed rate mortgage averaged 2.92% one year ago.
"Both the Treasury yield and the mortgage rate now are in the neighborhood of early-2015 lows," said Sean Becketti, Chief Economist at Freddie Mac. "These declines are not what the market anticipated when the Fed raised the Federal funds rate in December. For now, though, sub-4% mortgage rates are providing a longer-than-expected opportunity for mortgage borrowers to refinance."
The money market fund finished the week of 2/1 at 0.3%. The 1-year CD finished at 0.5%.
The 30-year fixed rate mortgage averaged 3.72% this week. This represents a decrease from last week when it averaged 3.79%. Last year at this time, the 30-year fixed rate mortgage averaged 3.59%.
This week, the 15-year fixed rate mortgage averaged 3.01%. This was down from last week when it averaged 3.07%. The 15-year fixed rate mortgage averaged 2.92% one year ago.
"Both the Treasury yield and the mortgage rate now are in the neighborhood of early-2015 lows," said Sean Becketti, Chief Economist at Freddie Mac. "These declines are not what the market anticipated when the Fed raised the Federal funds rate in December. For now, though, sub-4% mortgage rates are providing a longer-than-expected opportunity for mortgage borrowers to refinance."
The money market fund finished the week of 2/1 at 0.3%. The 1-year CD finished at 0.5%.
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To model generosity inspires others to do the same. Thank you for your interest in the Foundation as we strive to partner with churches, ministries, and Christians around the world to fund the important work of God's Kingdom.
To access updated financial and gift planning information, please visit our website, www.nazarenefoundation.org. If you would like more information about your charitable giving options or about how a Foundation representative can visit your church, contact us by phone at(913) 577-2983 or by email at info@nazarenefoundation.org.
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Church of the Nazarene Foundation
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To model generosity inspires others to do the same. Thank you for your interest in the Foundation as we strive to partner with churches, ministries, and Christians around the world to fund the important work of God's Kingdom.
To access updated financial and gift planning information, please visit our website, www.nazarenefoundation.org. If you would like more information about your charitable giving options or about how a Foundation representative can visit your church, contact us by phone at(913) 577-2983 or by email at info@nazarenefoundation.org.
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Church of the Nazarene Foundation
17001 Prairie Star Parkway, Suite 200Lenexa, Kansas 66220, United States
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