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Emergency funds: Why they’re worth it

March 6, 2018 by Brenda McGivern, CPA

Emergency funds can be helpful for everyone. Any unexpected hit to your finances, and unanticipated illness or a natural disaster might all be reasons you may need money right away.

What is an emergency fund?

An emergency fund is designed to keep your life intact during temporary setbacks and to help you avoid unnecessary debt. That means things like car insurance premiums and regular home maintenance (and other anticipated bills) should not be considered emergencies. The same is true of credit card bills for vacations.

How much emergency savings is enough?

In general, your emergency fund should cover three to six months of expenses. How much you’ll need will vary based on your financial situation, including the vulnerability of your income.

For example, a one-earner [Read more…] about Emergency funds: Why they’re worth it

Becoming a smarter renter

November 22, 2017 by Brenda McGivern, CPA

Renting an apartment, condo or house; leasing a piece of equipment; renting business property; and leasing a car all involve the common practice of renting something that is owned by someone else. To make sure you always have a good experience, here are some hints to becoming a smarter renter.

Read all agreements. Read the lease agreement thoroughly prior to signing. Ask for clarification of anything you do not understand. Look for clauses in the agreement that might suggest the property owner has problems with its current tenants. If the agreement seems unfriendly, don’t sign it.

Negotiate up front. Be ready to negotiate your lease terms up front. If anything is unclear in the lease, have it clarified and put in writing. [Read more…] about Becoming a smarter renter

Tips on tip reporting

November 21, 2017 by Brenda McGivern, CPA

If you are like millions of taxpayers who work in the service industry, you may receive tips. The tax code is clear; if you receive tips you must report them as income. Some employers have systems to make this easy, while others do not. Here are some suggestions:

Think 1-2-3

Proper tip reporting has three components.

1. Keeping a daily tip record

2. Reporting your tips to your employer

3. Recording your tips on your income tax return

Recording tip activity

Per the IRS, you can keep your tips by either maintaining a tip diary or by saving documents that show your tips. If your employer does not provide you with an electronic form of a tip diary, you can always create your own. The IRS has [Read more…] about Tips on tip reporting