The Lowdown on the Great Autumn Gourd

The Lowdown on the Great Autumn Gourd

Corn might be the king of U.S. crops, but pumpkins are always in demand this time of year by kids and others celebrating fall’s festivities.

Here are several interesting tidbits about one of America’s favorite fall gourds.

Germany boasts world’s largest pumpkin. Mathias Willemijns showed off the world’s largest pumpkin in 2016 at the Giant Pumpkin European Championship, officially weighing in at a stout 2,624.6 pounds. Steve Geddes of New Hampshire is the owner of the largest U.S. pumpkin, weighing 2,528 pounds at the 2018 Deerfield Fair.

Illinois is the U.S. pumpkin leader. Pumpkins are grown in all 50 states, but Illinois is by far the leader with about 600 million pounds of pumpkins harvested every year. Runner-up honors go to California, Indiana, Michigan, New York, Ohio, Oregon, Pennsylvania, Texas and Virginia. Each of these states annually produce approximately 100 million pounds of pumpkin.

Pumpkin beer has plenty of fanfare. Pumpkin beer was actually a thing hundreds of years ago when the Pilgrims arrived in America as pumpkins were plentiful and provided an easy source of fermentable sugar. Who knew?

Pumpkin carving started with the Irish. Jack-o’-lanterns were first carved by the Irish and Scottish using turnips and potatoes. They used the carved vegetables as part of their Celtic celebrations. Immigrants brought their carving traditions to America, but found that pumpkins were an easier vegetable to carve.

There are more than 40 varieties of pumpkin. The best pumpkins to use for cooking are Bab Pam, Autumn Gold, Ghost Rider, New England Pie Pumpkin, Lumina, Cinderella and Fair Tale. Most of the pumpkins you see on roadside stands and farms are for decoration only and not very tasty.

Don’t Make These Business Website Mistakes

Don’t Make These Business Website Mistakes

Your company’s online presence leaves a lasting impression—positive or negative. When people check out your homepage, will they stick around? Will they buy? Will they return? Make your website easy to use and current, and new orders may be just a click away. Annoy visitors and they’ll flee to a competitor.

Steer clear of the following website mistakes:

Designing the website for you—not the customer. Studies have shown that online visitors form an opinion of a company’s brand in about three seconds. If your home page is well designed, they may stick around for another ten to twenty seconds. Don’t waste these precious moments spouting details about the firm’s stellar history and the owner’s credentials. Consumers are visiting your website to get answers. Provide these answers quickly or they’ll click elsewhere.

Heavy graphics, poor load time. Many consumers are surfing the web from smart phones and tablets. Don’t make them waste valuable time waiting for a fancy webpage to load. Consider projecting a professional image with text-based content that answers the most pressing questions about your products and services. Graphics can work well, but only if size and load times are fully vetted to ensure a seamless load experience.

Unfriendly navigation. If your homepage looks cluttered, potential customers will become frustrated. Make it easy for users to navigate your site from home page to supplemental pages and back again. Use a handful of clearly-labeled tabs in a top level menu. Deliberately design each page to have the same look and feel.

Stale data. When you visit a webpage and note that it was last updated five years ago, do you sense a vibrant, cutting-edge enterprise? Keep your site up to date. Consider subscribing to content services that will keep your information fresh. Remember, developing a web presence is not an event, it is an ongoing journey. Your site must display current prices, merchandise that’s available right now, with up-to-date details about new product offerings.

Sloppy content. A website riddled with typos, grammatical mistakes and industry jargon will turn customers away. Visitors may ask themselves if your business doesn’t care about the quality of its website, how can they trust your products and services?

A carefully crafted website can draw customers in, enhance their buying experience and leave a lasting impression of professionalism and quality.

Have You Changed Jobs? Here’s What You Can Do With Your 401(k).

Have You Changed Jobs? Here’s What You Can Do With Your 401(k).

Suppose you’re switching jobs if you were furloughed because of the pandemic or you’re simply searching for greener pastures. If you have a 401(k) from your soon-to-be former employer, you must decide what to do with your retirement account when you leave. Here are your four options:

  • Leave the money in your previous employer’s pension plan.
  • Roll over the money to your new employer’s pension plan.
  • Roll over the money into an IRA.
  • Take the money and run.

So which of these options should you choose? Here are some things to consider as you think about what to do with your 401(k) account:

Keep the borrowing option open. If you want to borrow money from your employer-sponsored 401(k) account in the future, consider rolling the money into your new employer’s 401(k) plan. While you can borrow money out of your 401(k), that option is not allowed with an IRA. And if you leave your 401(k) at a former employer, they often will not let you borrow funds if you are not currently employed.

Take the money. This year may be the best time to make a withdrawal from a retirement account. In a normal year, when you make an early withdrawal from a retirement account, you owe income taxes on the amount of the distribution plus a 10% early withdrawal penalty. In 2020, this 10% penalty has been suspended. So while you’ll still pay taxes on the distribution, you may be able to avoid the early withdrawal penalty.

Invest the money. While it might be tempting to borrow or take an early distribution from your retirement account, you’ll also be depleting future earnings intended for your retirement years. So consider whether you truly need the money now to pay for an emergency or if you’re ok leaving it in your 401(k).

Whatever you decide, it is always best to transfer the funds directly from one retirement account to another. This direct transfer eliminates the possibility of your fund movement being characterized as a distribution subject to income tax. If in doubt, ask for help.

Is a Higher Net Paycheck a Sign of a Problem?

Is a Higher Net Paycheck a Sign of a Problem?

Is your net paycheck larger than it used to be for no known reason?  If so, it could be the result of less taxes being withheld – and it may not be a good thing.

The Problem

President Trump signed an executive order on September 1 allowing taxpayers to defer Social Security and Medicare taxes that are typically withheld through payroll.  While this may give you more net pay right now, it will have to be repaid later unless legislation is passed forgiving the tax.  This means that after the first of the year you might find that the withholding resumes AND you have to start repaying the taxes that were not withheld in 2019.  This may be an unwelcomed surprise.

What you need to do

  • Compare your pay stubs. Get your last pay stub from August and your current pay stub. Did the amount of Social Security and Medicare taxes withheld from your August paycheck change?  If so, you may be looking at a tax repayment bill in early 2021.
  • Keep an eye on each paycheck. Payroll departments are struggling to figure out if they are required to comply with the presidential executive order, payroll providers are trying to figure out how to comply, and everyone is wondering whether the tax obligation will be permanently forgiven.
  • Be prepared to pay it back if necessary. If Social Security and Medicare taxes have not been withheld from your paycheck through the end of 2020, be prepared to write Uncle Sam a check to pay these taxes in early 2021.
High School Students! Here’s How You Can Make College More Affordable.

High School Students! Here’s How You Can Make College More Affordable.

Students can earn college credits while still in high school

With the cost of college rising rapidly, it can be overwhelming to think about how to pay your way through school for either yourself or your kids. Fortunately, saving hundreds, even thousands, is possible. Teenagers can help keep down the cost of their future college tuition by taking the following classes and exams while in high school:

  1. Advanced Placement (AP) classes and exams provide the opportunity for high school students to take college-level classes at their high school and an exam at the end of the school year. Many colleges will accept AP credits as placement and/or college credit. Most will accept a passing grade of 3, but some universities may require a score of 4 or 5 to earn college credit. (AP exam scores range from 1-5.)
  2. College Level Examination Program (CLEP) tests also offer the opportunity to earn college credit by passing an exam. However, instead of taking a class, you must study on your own and schedule an exam at a testing center when you’re ready. CLEP exams receive a score between 20 and 80. A score of 50 is typically the passing score to obtain college credit, but each university sets its own requirement. It is important to note that while many colleges accept CLEP credits, some top schools do not accept CLEP credits.
  3. Dual enrollment classes allow high school students to take college courses at a local college or university and earn both high school and college credit. You must be a high school junior or senior to qualify for the program. Dual enrollment credits are widely transferable.

Cost of Exams and Potential Savings

AP exams cost $94, CLEP tests cost $85 plus an additional administrative fee while dual enrollment programs pay for tuition, fees and books. According to the College Board, the average cost of a 3-credit class at a four-year college ranges from $942 to $3,243, meaning for each 3-credit class you test out of, you save hundreds—potentially thousands–of dollars!

Additionally, earning college credit in high school can enable you to finish college in less than four years. Just make sure that when you’re choosing a college, you pay attention to whether or not the schools accept AP and/or CLEP exam scores as credit.

Don’t Make These Mortgage Refinancing Mistakes

Don’t Make These Mortgage Refinancing Mistakes

With 30-year fixed rate mortgages approaching historical lows of 3%, you may be thinking about refinancing an existing mortgage. But you better read the fine print before signing on the dotted line to avoid paying too much money. Here are some common mistakes homeowners make when refinancing their mortgage.

  • Not shopping around. When looking to refinance a mortgage, many homeowners simply check a couple advertised rates and pick the lowest one. But there are many factors affecting the total cost of refinancing, so it pays to carefully look at not just rates but also terms and fees offered by different lenders. Remember that a mortgage with a lower rate and higher closing costs from one lender can ultimately cost more overall than a mortgage with a higher rate but lower closing costs from another lender.
  • Saying yes to current mortgage loan forbearance. Loan forbearance occurs when your current lender allows you to delay making a payment or allows you to lower your payments. This is a common offer during the current pandemic. If you are considering refinancing in the future, think twice before taking advantage of this offer. Accepting a bank’s offer to skip a couple payments, even during a pandemic, may signal cash flow problems that could negatively affect your mortgage refinancing options.
  • Not improving your credit score. The willingness of banks to lend you money at favorable rates is often contingent on your credit score. You must therefore know your current score and actively work to improve it. So don’t take out a new loan or credit card in the months leading up to refinancing. Also pay your bills on time and never use more than 15% to 20% of your available credit line on credit cards. By doing this you can vastly improve your interest rates and related closing fees.
  • Not looking over the good faith estimate. Origination fees, points, credit reports and other fees are all included with closing costs when refinancing a mortgage. These fees aren’t finalized until you receive a good faith estimate (GFE). Any changes you notice to fees on the GFE compared to what you were originally told is a red flag. Compare the final refinancing document you’re about to sign with the rates and fees originally presented to you. Challenge any increases.

By being aware of refinancing pitfalls, you can actively eliminate any surprises and create a situation where multiple lenders are fighting for the right to lend you funds.

Should You Incorporate Your Business?

Should You Incorporate Your Business?

You may have started your business as a simple sole proprietorship that files its taxes as a Schedule C on your Form 1040. As your business grows, you may want to change the structure. Here are several scenarios where it may make sense to do just that.

Reasons to Create Business Entities

  • Establishing limited liability. The primary reason businesses form corporations and limited liability companies is to create a separate legal entity that provides legal protection. If your business receives a legal summons for a claim, for example, having limited liability may protect your personal assets like your home and car.
  • Hiring your first employee. Businesses are generally liable for their employees’ actions taken on behalf of the company. If an employee performs an act that causes an outside party to sue your business, the outside party can come after your personal assets to satisfy the lawsuit if you don’t have limited liability. You should, therefore, incorporate your business if you anticipate hiring your first employee in the near future.
  • Establishing credibility. Having LLC or Inc. after your business’s name conveys maturity in your business to customers and vendors.
  • Accessing credit and/or capital. Incorporating can also make it easier for your business to obtain financing through banks or investors. Banks want to see that your business is legitimate and not simply a hobby. Bringing in investors also requires a business form that allows you to do this. Individuals often co-mingle personal funds with business activity, making it hard to consider lending money.

What you need to do

There are several different business entities to consider, including corporations and limited liability companies. There are pros and cons to each entity that must be considered. Added to the complexity are constructing the correct legal filings and related tax obligations for sales tax, income taxes, unemployment and workers’ compensation.

The process of selecting the right structure for your business is not for the faint of heart. Develop connections with professionals that can walk you through this decision-making process.

How Stay-at-Home Orders Change Money Habits

How Stay-at-Home Orders Change Money Habits

The most fruitful periods of growth often happen when they are the least expected. Teachers and parents call them teachable moments. By reflecting on how you handle the situation, you can learn a lot about yourself. The disruption caused by this year’s pandemic is a massive teachable moment for all of us regarding money. Here are three ways you can take advantage of our recent stay-at-home orders to improve your spending and saving habits.

Take a different approach to tracking your spending. No matter who you are, your spending habits have changed during the pandemic. For example, more money is being spent at the grocery store and less on eating out and entertainment. And if you own a home, odds are you’re investing more in your house projects than you have in the past.

By taking away the ability to spend on things we would normally purchase, stay-at-home orders offer the opportunity to learn about the things that bring us joy. Look at your purchases over the last month and note which ones were worth the money. Then think about the things you miss the most. Maybe it’s going out to eat with friends or attending a concert or a sporting event. This exercise will give you a snapshot of what type of spending is the most satisfying for you and will help your decision making in the future.

Save, save, and save some more. If you learn one thing from this pandemic, it’s that nothing is certain. Circumstances can change in an instant and even the best plans can be tossed to the side at any moment. If you are fortunate enough to have consistent income, now is the time to start building your emergency and retirement funds. Instead of diverting funds to your entertainment budget, put it in savings. You never know when the next income-altering event will arise, so stuff that financial cushion while you have the chance.

Create a habit of giving. With unemployment rates in some places as high as we’ve seen since the Great Depression, there are plenty of opportunities to help those in need. If you have some extra cash, now is a great time to increase your giving. Beyond the positive impact to others and your community, studies show that giving can make you feel happier, provide greater life satisfaction, and even activate reward centers in the brain (according to the University of Oregon). On top of all that, you may be able to deduct your contributions on your taxes — just make sure to give to qualified 501(c)(3) charities.

How to Eliminate a Tax Surprise

How to Eliminate a Tax Surprise

What is normally a reliable estimate of your taxes – the amount of money withheld from your paychecks by your employer – may be an unreliable estimate this year thanks to the current pandemic. Even worse, using the safety net of paying in what you did last year may not be practical if your financial situation changed due to the coronavirus.

Many taxpayers wrote a large check to the IRS this year for the very first time to pay a portion of their taxes as the 1st and 2nd quarter estimated tax payments for 2020 were both due on July 15. Because of this it may be beneficial to review whether you need to make a 3rd quarter or 4th quarter estimated tax payment in the coming months.

Here’s how to ensure you are not faced with an unpleasant tax surprise – because either not enough money was withheld from your paychecks for income tax purposes or your estimated tax payments were too small – when you file your 2020 tax return next April.

  • Step 1: Estimate your 2020 income. Add up your anticipated income for 2020 – W-2 paychecks, unemployment compensation, business income, interest and dividend income and any other form of income.
  • Step 2: Estimate your 2020 deductions. Add up your anticipated deductions for 2020, including retirement and health savings account contributions, student loan interest you paid and itemized deductions. If you’re not sure, take a look at last year’s tax return and use that figure.
  • Step 3: Calculate your tax. Subtract your deductions from your income to calculate your taxable income. Then calculate the tax you owe based on your taxable income using the IRS tax tables. Use last year’s table until the new one is published later this year. Here is a link to the IRS publication: IRS tax table
  • Step 4: Calculate your remaining estimated tax payments. Take the tax calculated in Step 3 and subtract any 1st and/or 2nd quarter estimated tax payments you made, and any paycheck withholdings so far this year. If you owe more than you have paid in or have had withheld so far this year, you have two more quarters to make up the difference through estimated tax payments.
  • Step 5: Mail your payment to the IRS. The due date to make a 3rd quarter estimated tax payment is September 15, 2020. The 4th quarter deadline is January 15, 2021.

Sound complicated? It definitely can be. If you get stuck trying to figure out if you should make estimated tax payments or have any other questions, please call. Remember, it is better to plan now than to face the unpleasant surprise of an unwanted tax bill on April 15th.

Help! My Stimulus Payment is Wrong or Missing!

Help! My Stimulus Payment is Wrong or Missing!

Millions of Americans already received their economic impact payment. But what if you’re still waiting or your payment was for an incorrect amount?

Here are some common scenarios why you may not have received your payment, or the payment you did receive was for an incorrect amount, and what you can do.

  • Your payment was sent to a closed bank account. If you didn’t update your banking information or mailing address before your payment was processed, your money will probably end up in the wrong location.

    What you can do: You probably must wait. If your bank account on file with the IRS is closed or no longer active, the bank will reject the stimulus payment deposit and you will be issued a physical check to the address the IRS has on file for you.
  • Your check was sent to a wrong address. The IRS will send stimulus checks to the mailing address listed on your most recently-filed tax return. The IRS will also mail a letter with information about how and where the stimulus payment was made, but this letter will go to the most recent address on file.

    What you can do: Change your address on file with the IRS by filing Form 8822. While it won’t solve your immediate problem, your change will correct future issues. In the meantime, keep tracking the status of your payment by visiting the website Get My Payment. You can also try and contact the new people who live at your old address.
  • You didn’t get paid for your dependents or you think your check amount is incorrect. You are certain that you should have received a full $500 payment for each qualifying dependent and the payment was either not received or was for an incorrect amount.

    What you can do: If you did not get the full amount you think you should have received, you will be able to claim the additional amount when you file your 2020 tax return.
  • You received a check for a deceased relative. With more than 300 million people living in the U.S., it probably shouldn’t be a surprise that some of the stimulus checks were mailed to deceased individuals. Unfortunately for living family members, you can’t keep this money.

    What you need to do: You should open the check, write VOID on the check and then return it to the IRS. If the payment was via direct deposit or a check received from the IRS was already cashed, you should write a personal check to the IRS to return the money.

Receiving the wrong amount of money in your stimulus check or not receiving a check at all can be very frustrating. But be reassured the IRS is doing everything it can to help you get the correct amount of money that you deserve.

More information: If you have other questions or concerns, the IRS has a question and answer resource. Click here to read through the IRS Q&A.