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Dev Goswami





            By DEV GOSWAMI, CFP�

Why enlist the services of a financial planner when your holdings are down and you�re facing a host of financial problems? Because as dark as times may seem, you�re actually giving yourself a fresh start in building a stronger financial future.

Indeed, many people don�t make that choice. A recent Financial Planning Association/Ameriprise Financial survey showed that many people try to go it alone when it comes to a financial plan � and they suffer considerably worse performance in their investment and savings goals over time than those who do. The cost of a financial planner may not be prohibitive due to factors we�ll mention below and young people have a particular advantage on their side when using one � time.

Here are some things to know about financial planning process.

It�s a collaboration and a learning experience.  

A financial planner is not a substitute for your own final decision-making. Planners serve as guides, editors and strategists. They should begin by asking questions of you � plenty of them. Their purpose is to find out all the goals you have right now � and maybe determine a few you haven�t thought of.  Some of these dreams might include buying a home or business for yourself, saving for college education for your children, taking a dream vacation, reducing taxes and retiring comfortably. Financial planning is the process of wisely managing your finances so that you can achieve your dreams and goals � while at the same time helping you negotiate the financial barriers that inevitably arise in every stage of life.

Planners often specialize: 

Planners, like any professionals, tend to specialize in certain areas of interest, and they may receive continuing education in more than a dozen areas of expertise. Certified Financial Planner� professionals alone can earn continuing education credits in asset management, employee benefits, commercial real estate, insurance, investment management, estate management, retirement planning, 401(k) administration and health topics, among others.

Ask about tackling specific problems:

If your problem is credit card debt or difficulty refinancing, a planner may have specific contacts or the ability to make certain recommendations on how to get yourself in a better position to plan for the future.

They charge based on specific services:

Planners charge for their services in a variety of ways � always ask up front what they charge and how they expect to be paid. Some �fee only� planners charge for a consultation, plan development or investment management, and they may be charged on an hourly or project basis depending on the client�s needs or as a percentage of assets under management. Some charge commissions for the sale of financial products they are licensed to sell, and others have hybrid structures mixing fees and commissions. Discuss advisory services first before committing to buying any particular products.

They can talk about your personal investments as well as the ones at work:

One of the best advantages to working with a financial planner is the chance to have a second set of eyes look at your wages, investments and benefits at work vs. what you�ll be investing on your own outside work-based retirement and other savings plans. Be prepared to bring all of your finances into the discussion.

This article was produced by the Financial Planning Association, the membership organization for the financial planning community, and is provided by Dev Goswami, CFP�, a  member of FPA, who offers securities through: The O.N. Equity Sales Company, Member FINRA/SIPC, One Financial Way, Cincinnati, Ohio 4524, and Investment Advisory Services through: O.N. Investment Management Co. He can be reached at (904) 565-2969, e-mail at [email protected] or visit www.DevGoswami.com.

Kamlesh Patel



homebuyer credit is extended and expanded


If you missed the Nov. 30 deadline to qualify for a tax credit on your new home purchase, here�s some good news for you.

The Worker, Homeownership, and Business Assistance Act of 2009, signed into law Nov. 6, 2009, makes the credit available through April 30, 2010. If your transaction is incomplete as of April 30, you�ll still be able to claim this tax break on your 2009 or 2010 return, provided you have a binding written contract and close by June 30, 2010.

In most cases, the amount of the credit remains the same � 10 percent of the price of your new home, up to a maximum of $8,000 � and it�s still refundable. In addition, recapture requirements are unchanged. That means you won�t have to pay the money back as long as you live in your new home three years. Changes include:

  Purchase price restriction. For homes bought after Nov. 6, 2009, the credit is available only when the total purchase price is less than $800,000.

  Relaxed eligibility requirements. You�re now a �first-time homebuyer� if you used the same residence as your main home for five consecutive years of the eight years prior to buying the new house. However, if you qualify under this rule, the credit is limited to a maximum of $6,500.

  Increased income phaseouts. If you purchase or close on your new home between Nov. 6, 2009, and June 30, 2010, the credit begins to shrink when your modified adjusted gross income reaches $225,000 (for married filing jointly). The threshold is $125,000 if you�re single.

  Minimum age and dependency status. You or your spouse must be at least 18 years old and not claimed as a dependent on anyone else�s return.

  Unrelated seller. The person you purchase the house from cannot be a relative.

  Return attachments. You�ll have to include a copy of the closing statement with your tax return.

The new law also makes changes that benefit members of the military, including payback waivers and an extra year to claim the first-time homebuyer credit.

roth ira rule change could benefit you

Starting in 2010, more individuals will be able to convert a traditional IRA into a Roth IRA. That�s when a provision in a 2006 tax law goes into effect, ending the $100,000 income limit to qualify for a conversion. If you�ve been unable to qualify for a Roth IRA in the past, this rule change could create a tax-saving opportunity for you.

The basic rules governing IRAs are fairly straightforward. Contributions to a traditional IRA are tax-deductible, and withdrawals made at retirement are taxable as ordinary income. Conversely, a contribution to a Roth IRA is not tax-deductible, but retirement withdrawals are not taxable. In addition, the traditional IRA requires distributions beginning at age 70�, while the Roth has no such requirement.

These two features � nontaxable distributions and no age 70� withdrawal requirement � have made converting a traditional IRA to a Roth attractive to many taxpayers. But the catch has been that one�s income could not exceed $100,000 to qualify for a conversion. Next year, that $100,000 is eliminated and Roth conversions become available to everyone.

The conversion from a tax-deductible IRA to a Roth is a taxable event, and you must include the entire amount converted in your taxable income. If you do a conversion in 2010, you may elect to report half of the income on your 2011 tax return and the remaining half on your 2012 tax return. You also may choose to pay the taxes due on the conversion on your 2010 return. Paying the total tax due on your 2010 return might seem unwise; however, current tax rates are scheduled to expire after 2010. If later years bring higher tax rates, postponing income could mean a higher tax bill on the conversion.

If you anticipate converting to a Roth next year, you might consider building up your traditional IRAs this year. Even if you don�t qualify for a deductible IRA, you could contribute to a nondeductible traditional IRA and convert to a Roth in 2010.

bring corporate minutes up to date

To preserve the legal benefits of incorporation, corporations must hold regular directors� meetings. By keeping clear and appropriate records of these meetings in the form of corporate minutes, firms can save taxes and avoid business problems.

Properly documented transactions are more assured of getting favorable tax treatment. For example, compensation to an employee-stockholder is tax-deductible only if it�s necessary and reasonable for business operations. When setting corporate officer compensation, consider recording comparable industry salaries, the officer�s scope of responsibility, job qualifications and experience, and current economic conditions. Documenting all these factors will show that the compensation was reasonable and, therefore, tax-deductible.

Other business matters with potential tax consequences should also be carefully recorded in the minutes. These include loans, leases, or other transactions between officers/shareholders and the company; dividends; bonuses; and deferred compensation arrangements. Your goal should be to clearly document the business intent behind each decision.

But you may not want to record everything. Generally, firms should record only final decisions, not the detailed discussions that led to those decisions. If a particular corporate decision is challenged later, you don�t want a record of the differing opinions before consensus was reached. This can give fuel to those who want to question how the firm acted.

Keeping complete and accurate minutes of your corporate meetings may seem like a bothersome task, but the time spent now can save your corporation a great deal of money later on. So, get with your attorney and bring your corporate minutes up to date.

Kamlesh H. Patel, CPA, can be reached at (813) 949-8889 or e-mail [email protected] or [email protected].


Vijay Marolia





This is the time of the year when we sit down face-to-face with our clients for their annual financial reviews. During these meetings, I try to uncover their biggest concerns by asking them, �What keeps you up at night?�  

Nowadays, cautious clients are asking me the same question. My answer is simple; dollars and debt are what keep me up at night. But it�s not my dollars, or my debt that worry me. I�m worried about our dollars and our debt as Americans. 

Most of us are well aware that the leaders of our government (in their infinite wisdom) are very good at spending more and more each year. But the amount and the speed of that spending is mind boggling. The problem is that part of the spending is done with money we don�t yet have; hence, we borrow.

At the beginning of 2008, our national debt stood at about $9.2 trillion dollars. By the time you read this, it will be approaching $12 trillion*. But that does not include the unfunded promises we have made to ourselves in the forms of Social Security, Medicare, and Medicaid. In fact, the Peter Peterson Foundation estimates that if we include those promises, our real national debt is actually closer to $56.4 trillion (56,400,000,000,000)!

That means every household in the country owes approximately $483,000. In other words, every man, woman and child has a debt of $184,000 � not including the debt that they actually know about (mortgage, car loans, credit cards, student loans). As you may have observed from your children or grandchildren, it�s not easy these days for a kid to come up with $184,000! It is however easy for our government, via the electronic printing presses at the Federal Reserve. I�ll come back to that later �

Of course, the problem with debt is that we must pay interest on it. In the fiscal year 2008, our government spent $412 billion on interest payments alone. To put that in perspective, that same year, the total amount our government spent on education was $61 billion � that�s almost $7 of interest expense for every $1 of our children�s education*. It is my humble opinion that many of the fundamental problems our society faces have their roots in that last sentence. 

Now, to pay for all this debt, the government must either raise revenues through taxes, or print money out of thin air. It will mostly likely do both. Although we and our clients are preparing for higher taxes in the near future, many are not at all prepared for the inflationary consequences that will inevitably arise in years to come. 

At the end of 2008, the Federal Reserve accelerated the pumping of money into the money supply by crediting excess reserves to the member banks. Before August of 2008, excess reserves made up about 5 percent of the monetary base (money supply).  Now, those reserves make up more than 90 percent*. In fact, although the history of this country spans over 230 years, we have somehow managed to double the money supply in just the last three years**! That is not a typo! Inflation may not be today�s problem, but it will be here eventually. 

But enough with the doom and gloom. You may be wondering how I ever manage to fall asleep after reading that. But I sleep very well knowing that by preparing myself, my family, and my clients for this potential scenario, we will all be able to prosper from it, rather than suffer from it. Unfortunately, those that are not prepared may suffer huge losses in purchasing power and/or their standards of living. Do NOT let this be your family. 

Please be sure to discuss these issues along with any other concerns you have with your financial advisor during your upcoming annual reviews. And remember, where some see only crisis, the wise can see opportunity.

Vijay J. Marolia, MBA, Chief Investment Officer at Private Wealth Management, can be reached at 1-800-700-2850 or visit www.privatewealthmgmt.com

*source: Board of Governors of the Federal Reserve System

**source: David Rosenberg of Gluskin Sheff  



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