Is the holiday season indeed “the most wonderful time of the year”? One could make a strong argument.

However, for every gift we receive there are 10 or so emails asking us to give to a cause. Whether online or via snail mail, charitable organizations capitalize on the season’s tax-reducing giving benefits.

No one can blame these organizations — it’s people like me who help their donors (YOU) realize that their (your) tax bill can be reduced, and giving can be amplified as such. Many of these orgs are doing great things.

But there are some out there who do send year-end appeals with mail-icious intent. (See what I did there?)

Yet if you know a few key signs to look for, Kansas City scam artists don’t stand a chance. But they can be tricky!

Here’s how to tell…

How Kansas City Taxpayers Can Avoid Fake Charities

“To do more for the world than the world does for you — that is success.” -Henry Ford

An unfortunate reality: fake charities abound in this country. Many individuals set up nonprofits for the sake of financial gain — and some are really good at the disguise. Charity Navigator is a simple online tool to look up the validity of various charities (or lack thereof).

The Fraud Advisory Panel has a plethora of resources for you to thumb through should you wish to learn more.

Contact Authorities

If you come across a charity that you know is a scam, the IRS recommends the following:

1. Don’t reply.
2. Don’t open attachments. They might carry malware that will affect your computer or phone.
3. Don’t click any links. (If you have in the recent past, visit IRS identity protection for further steps to take.)
4. Forward the scam email, preferably with its full headers (to, from, subject, etc.), to the IRS at phishing@irs.gov.
5. Delete the original email.

Seek Real Causes to Support

The nature of my thoughts today make it sound like you should always be skeptical. And that’s true … to an extent.

Like I said earlier, there are MANY out there who are doing great work through legit nonprofits. That’s why it’s a shame this season gets sullied by a bunch of people seeking money for illegitimate reasons. But my advice to you is to dive personally into a nonprofit or two throughout the year. Don’t let November or December roll around, only for you to give money to an organization you don’t know much about.

Attend an event, ask your close friends and make your support a year-long process.

“You have not lived today until you have done something for someone who can never repay you.” – John Bunyan

So consider giving this holiday season.

Warmly,

Kyle Nagy

(913) 693-7984

KPN ENTERPRISES LLC

November is a wonderful start for holiday season with several traditions to match: pumpkin-spiced everything, no-shave November (apologies to those spouses affected), watching football and of course … Thanksgiving.

Sorry to poke my accountant’s green shades into all those festivities, but it also happens to be a perfect time to strategize. (Add that to your new November “traditions” list.) We’re going to look at five key tax moves you can make it in November. Before we know it, spring will bloom and you’ll be glad you read this.

But just reading/talking about these moves is one thing — acting on them is what will save you money in the future.

Now THAT’S a tradition worth celebrating no matter the month.

Please reach out to me so that we can start implementing some of these strategies ASAP. You bring the latté; I’ll bring the game plan.

A Trusted Kansas City Professional’s Thoughts For Your 2019 Taxes

“Let us remember that, as much has been given us, much will be expected from us, and that true homage comes from the heart as well as from the lips, and shows itself in deeds.” -Theodore Roosevelt

In Q4, we often strategize for our 2019 taxes. But this is also a vital time to take 2020 into consideration. Don’t wait until January 1 to make some sort of new year tax resolution. We all know how those end up most of the time.

Instead, let’s get a jump start on this year and next. The first step is to determine your income thus far in 2019, then forecast what that number will be by year’s end. Once you have that number, we can decide what 2020 will look like (More? Less? The same?) — and strategize accordingly. Doing this allows us to defer and/or accelerate write-offs. I’ll help you get this process started!

Itemized vs. Standard Deductions

The two-year strategy also allows you the option to itemize or use larger standard deduction amounts. The Tax Cuts and Jobs Act (TCJA) 2019 standard deduction is $12,200 for single filers and twice that amount if filing as a married couple.

There are a few more strategies to look at when it comes to deductions. And we’re best served sitting down together to discuss your unique tax situation.

Focus on Form W-4

The TCJA certainly shifted tax rates and income amounts taxed beneath those rates. Unfortunately, many were not ready for the refund they received last spring because they were unaware of rate changes.

In an effort to adjust your expectations, this IRS withholding calculator will take your paycheck and provide a more accurate forecast for the spring. This is a crucial move in November because we can get a sense of what paycheck changes need to happen now — there’s still time to spread paychecks out moving forward.

Invest in Your Health

Many Kansas City companies offer a medical flexible spending account (FSA), and if you’re one of those lucky individuals it’s time to schedule that doctor appointment. Many FSA accounts require that the money saved is spent by December 31, so don’t hold onto that cash too long.

‘Tis the Giving Season

Naturally, November and December present a big push for nonprofit + charitable giving opportunities. If you aren’t factoring how these giving strategies could affect your tax strategy, then we must meet to discuss why it’s so important. However, if taxes are the only reason you’re giving to a charity, I might suggest you rethink “why” you give.

If there are no organizations on your radar, do some research in your area. It’s vital to support Kansas City local businesses, and therefore communities, with the money that’s been entrusted to you.

And there you have it! There are certainly more November tax strategies, but these are a good start. Please let me know if you have any questions. I’d be more than happy to start a conversation.

Until then, may we prepare our stomachs for the Thanksgiving feast. And more than good food and drink, may we look for ways we can serve others in need — so that we can all truly give “thanks” this holiday season.

Warmly,

Kyle Nagy

(913) 693-7984

KPN ENTERPRISES LLC

The World Series is here, football seasons are in full swing, school is deep in session, and the weather is shifting for sure.

Fall has a way of running along faster than we realize.

It’s kind of like our financial picture: things can change REAL fast, and before you know it, we’re buried under a pile of something that we’d rather not be under.

So, here’s what I’m getting at: If you’d love to get out of debt, raise your hand.

Because I can’t physically see you right now, let’s just play the percentages and assume you’re raising your hand. And by “play the percentages” I mean that, according to a Pew Survey on Debt, at least 80% of Americans are trudging through some sort of debt to their name.

Now, before we go any further, I want to address two forms of “debt reduction” that might come with some setbacks…

1. Debt Settlement: This method means inviting a third party to negotiate out of standing debt in your name. However, it’s deceiving in that you often end up paying more out of pocket than if you had just taken on the debt yourself.
2. Debt Consolidation: The consolidation method is used by companies that essentially roll all your debt into one lump sum, then charge you at a lower interest rate. And although that seems nice to start with, it actually (usually) just means you’ll be in debt for a longer period of time.

So let’s look instead at three simpler methods you can use to get out of debt. Of course, nothing worth doing well is going to be a quick fix. But if you start today, you can begin chipping away at debt (read: stress) and get back on track ASAP.

Kyle Nagy’s Three Keys To Get Out of Debt
“Budgeting has only one rule: do not go over budget.” -Leslie Tayn

Let’s put things in three easy steps, shall we?

Strategize: List out all debts (ALL DEBTS) and go
It’s incredibly hard to chase after goals that aren’t clear or concrete.

The first thing I want you to do is list out all the debt you have. Ideally, find a room with a whiteboard and go to town. This is helpful because you can snap a picture afterward.

When you list it all out, make sure you organize the list from the smallest debt you have to the largest. You will use this list as a reference guide throughout the duration of your debt domination. It might seem discouraging to list it all out at once, but view it as giving your enemy a face — now you know who you’re fighting; now you can go and win the fight. This will help for when you…

Pay: Make minimum payments on large debt first. Then think small.
Again, with your debt listed out for reference, start with those larger payments and the minimum payments you can start putting toward each piece of debt.

“How do you eat an elephant? One bite at a time.”

Now, the smaller pieces of debt that come along — medical bills, short-term bank loans,  etc. — are still very important to pay off. But you can eliminate them in one fell swoop through hard work and dedication. What does that look like exactly? In today’s gig economy, picking up a “side hustle” or small job on the side is doable and advantageous for your resume/career. It also is a smart strategy to say, “All the money from this side gig will go toward paying off X debt.”

Paying off debt isn’t a cake walk, but the sooner you pay it off, the less guilty you feel eating cake.

Persist: Paying off debt should be consistent … until it’s gone!
Eating an elephant is no small task. But persistence is IMPERATIVE when it comes to eliminating debt.

In addition, while you are on this quest — please don’t get discouraged when other people post pictures or talk about living a debt-free life. Those people crossed their finish line. And good for them! It’s an accomplishment worth celebrating. But you have YOUR race to run. And it might take a few extra months or years, but imagine the payoff. That’s what I want for you, your friends and family.

Please reach out if you have any further questions on reducing debt. I’d love to help you take the first step. Everyone’s story is different — everyone’s story is important.

Warmly,

Kyle Nagy
(913) 693-7984
KPN ENTERPRISES LLC

Autumn is here, and in some parts of the country, apparently that already means snow…

Weather is a close second to “life” in terms of unpredictability.

So I think that means two things:

1. You should always carry an umbrella.
2. Your life insurance policy should be clear and up-to-date.

Today, we’re going to focus on that second item and how life insurance is CRUCIAL for the good of your family and loved ones.

Think you’re set in this area? That’s great. But there are still some items to keep in check. Because remember: just like a tax return that hasn’t been planned for (ahem), life is unpredictable and I want you prepared for what can happen.

Here’s what I mean…

Nagy’s Rules of Thumb for Life Insurance

“The future has a way of arriving unannounced.” -George F. Will

I often get asked about what level of insurance my clients should carry, so I thought I’d put this to you to keep for reference, and hopefully act upon. Even if you have this thing down pat, feel free to send to someone else you know is in need of some help.

I’m happy to help think this through with clients, or really, anyone who needs some unbiased advice.

For Starters

If you have a spouse and/or kids, please secure life insurance AS SOON AS POSSIBLE. And even if you don’t, paying for basic life insurance coverage is a solid budget item to get you in the habit of paying necessary insurance.

Term Life Insurance is the safest bet for starters. This policy will be in force for a certain number of years and will pay out a certain amount if you die during that term.

Note: Some people encourage policies that are versions of a Whole Life policy (a.k.a. universal life, indexed universal life, variable life, etc.). These can be great and, in some cases, very compelling tools. But they are not mandatory for your basic coverage.

The Amount

Now, let’s break down what an average policy could look like.

In the breakdown, it’s important to consider two primary factors:

1. The term (length in years you are going to pay and be covered)
2. The face amount (the amount the policy will pay when you get hit by the proverbial bus)

Let’s first look at the amount…

• Start at $50,000
• Add enough (in round numbers, to the closest $10,000) to cover any consumer debt, student loans, and mortgage balances.
• Add $500,000 for each kid you have under ten years old
• Add $250,000 for each kid you have over ten years old.

The total amount is how much you should have in coverage. If you are married, this is the amount of coverage the spouse with the lower income should carry. The primary or larger income spouse should carry double this amount.

The Term

Next, you want to calculate a reasonable term for your policy.

• If you have any kids under ten, use a 20-year term.
• If you are under 40 years old, use a 20-year term.
• If you are between 40 and 55, use a 15-year term.
• If you are between 50 and 55, use a 10-year term.
• If you are over 55, you need to contact a professional, as the rates get way more complicated.

Need a recommendation on which Kansas City professional to help you put together a policy? Reach out to me — I’d be happy to give you my input. (913) 693-7984

The Legal Documentation

To tack a bow on the life insurance conversation, I want to also address the importance of a will and/or trust.

I HIGHLY RECOMMEND reaching out to a local Kansas City lawyer soon who can help you file this basic legal documentation.

We will dive a little deeper into wills and trusts in the near future, but I leave you today thinking about the importance of life insurance and how it will eventually impact your friends and family. In the same way, make sure they know the importance of a policy and how it can benefit.

Because in the unpredictability of this roller-coaster life, the least we can do is help one another buckle up.

Warmly,

Kyle Nagy

(913) 693-7984

KPN ENTERPRISES LLC

Yes, there is chaos in the political world. Since it’s not related to our vocation around here, I’ll withhold comment, and let’s move on to a happier conversation.

Paying for college.

(Yes, that was sarcasm.)

So much ink (and an abundance of pixels) has been spilled over the past decade about rising tuition costs, that sometimes parents overlook the fact that tuition isn’t the only component of college costs to consider.

Here’s what I mean…

Total Cost of College For Kansas City Folks

“The things taught in schools and colleges are not an education, but the means to an education.” – Ralph Waldo Emerson

If you’re reading this, you fall into one of two categories:

1. The Kansas City parent with a child approaching, attending or having graduated college.
2. Someone who knows a parent with a child approaching, attending or having graduated college.

And instead of highlighting ways to save for those college costs (which we’ve done in the past and likely will revisit in the future), let’s break down some of what makes college so expensive in the first place.

Because it’s not just rising tuition.

By the way, if you have questions on immediate ways to save for college, please give me a call. There are MULTIPLE tax-sensitive components of higher-ed savings, and I’d love to discuss them in-depth with you over the phone or during a meeting.

Tuition & FEES

“Tuition” specifically relates to the education a student receives while at university — the classes, faculty, campus resources, and opportunity to earn a degree. The “fees”, on the other hand, relate to those hidden costs within that education: admin fees, school activities and clubs, etc.

In addition, there are other costs SEPARATE from even tuition and fees — “Room” (the costs for housing) and “Board” (costs for a meal plan). And lastly, books and other classroom materials that add up to a large chunk of change for students.

Billed Costs

When living in on-campus housing, the university will typically issue a combined bill for all tuition, room, board and fees that apply to each student. This is the “total cost of college attendance” (in terms of billed costs), or TCOA.

Financial aid is applied to this bill beforehand so the cost is shown and collected at a more manageable rate (for the spender).

These total costs are a topic about which parents/caregivers and their students should communicate. If parents are paying any part of the bill each semester, it’s important the student has an idea of the payment structure (both present AND future) backing his or her education. Too many students graduate with a load of debt to pay off and have no idea how such a large number accumulated over time.

And this is often because they are blindsided by the fact that tuition isn’t the only item being billed. And then, there are the…

Unbilled Costs

One could infer: unbilled costs are the “hidden” costs associated with college (books and classroom materials, travel, personal expenses and so on).

This is where strategy comes into play when planning your college costs. All college-goers should keep in mind the following when budgeting for unbilled costs — those costs that aren’t “required” by the university but inevitably work your way.

• Cost of living in the college town itself
• Various off-campus housing options
• A budget-friendly meal plan (or a grocery budget)
• Ancillary costs associated with particular classes and majors
• On-campus entertainment (and alternatives)
• Travel and transportation expenses

If a student can devise a solid strategy (read: budget) pertaining to these items (in addition to the standard, predictably “billed” costs), then he or she is set up for success in the college costs game.

Many of us know the short-term gratification college can bring to the student, but the delayed gratification comes with steady bouts of responsibility and faithfulness.

These, my friend, are the total costs of attendance.

And all of it should be planned for.

Warmly,

Kyle Nagy

(913) 693-7984

KPN ENTERPRISES LLC