Should I Be Concerned About Federal Tax Reform?

Although the 2016 tax season is upon us, there is a lot of talk about what changes might happen to our tax system going forward.

First, I can’t resist citing some of the more famous quotes about taxes.

Benjamin Franklin said, “In this world nothing can be said to be certain, except death and taxes.”

Will Rogers stated, “The only difference between death and taxes is that death doesn’t get worse every time Congress meets.”

Albert Einstein opined, “The hardest thing in the world to understand is the income tax.”

While we might all agree that we don’t like taxes and we’d like them to be simpler, what would tax reform look like?

It may be worthwhile to consider the history of personal income taxes in the U.S. The income tax was introduced during the Civil War in 1861 and was expanded during World War II. In short, revenues were needed to cover large obligations. In between those periods and now, there have been numerous changes, tweaks and adjustments. Our country’s obligations have not gone away, so taxes probably will stay around for a while.

Tax reform is nothing new, and some degree of tax reform seems likely. In early 2016, Republicans in the U.S. House of Representatives published a tax reform summary of policies, or “blueprint,” that could form the basis of new tax legislation in 2017. President Donald Trump campaigned on the promise of large-scale tax reform. Late in the campaign, the Trump camp released a revised tax plan that moved the candidate’s proposals closer to the House Republicans’ plan.

For now, it may make sense to focus on provisions common to both the Trump plan and the House GOP blueprint, which include:

  • Reducing the number of income tax brackets from seven to three (12%, 25% and 33%).
  • Increasing standard deduction amounts and limiting use of itemized deductions.
  • Repealing the federal estate tax, alternative minimum tax and 3.8% net investment income tax.
  • Lowering the business tax rate from 35% to 15% (Trump plan) or 20% (House Republican plan).

Many differences must be ironed out among all parties.

Who will be affected, and what, if anything, should you do about it?

“People who complain about taxes can be divided into two classes: men and women.” — Unknown

Nearly everyone could be affected by these changes – corporations, individuals and small businesses (most of which are held as sole proprietorships, partnerships or S-Corporations and are taxed at the personal income level). As a result, nearly everyone could be affected by these changes.

Without the benefit of a crystal ball, here a few tips to consider during this period of uncertainty:

  • Pay attention to your deductions. If the standard deduction increases, it may benefit folks who have paid off a mortgage and no longer deduct the interest expense. On the other hand, a lot of people don’t take the time to itemize, even though it could benefit them.
  • Review your estate plan. A periodic review can be a good idea for nontax reasons, but for those with larger or more complicated estates, it might be a good idea to speak with your legal and tax counsel to review various scenarios if estate taxes go away completely and are replaced with something else.
  • Review your investments from a tax perspective. As the saying goes, “It’s not what you make, but what you get to keep,” and this is especially true during periods of tax adjustments. Aside from the price effects to your investments from all of the tax change talk, consider how your investments might benefit, or suffer, from tax reform. For example, if your portfolio is heavily concentrated in municipal bonds, will they still make sense if you land in a lower tax bracket down the road? Or if dividends end up being taxed at a lower rate, will dividend-paying stocks look better?

While it’s impossible to predict exactly what new tax legislation will look like, or to cover all the potential effects of tax reform, it might not hurt to consider some of the possibilities that could affect you. Remember, as we say here in Texas, “Just like the weather, if you’re not happy with the current tax structure, wait a minute, and it will change.”

Speak with your tax and legal counsel regarding your personal situation.



‎02-20-2017 07:30 AM

Content provided courtesy of USAA.

By Robert Steen, CFP, MBA 

Avoid Debt By Saying No To An Additional Monthly Payment

Monthly payments are often an irresistible trap to get what we want for a small fee.  After all, who does not want the latest car, smart phone or access to the latest on-line movie?  We all want these things, which is why the additional monthly payment is one of the easiest ways to get into debt.

Follow these tips to find ways to avoid another monthly payment and to keep your debt levels within your monthly budget and financial goals.

Avoid Another Monthly Payment Advice #1 – Just Do Not Look.  Say no to any opportunity to go and look at something that you know that you cannot afford or do not need.  I love skeet shooting and the featherweight, engraved high-end shotguns.  My dad had a beautiful gun that he used for skeet and I have wanted one like it for decades.  However, I have college funds, new tires, and retirement investments that I need to make in order to meet my financial goals.  Therefore, I do not go to gun stores and I do not go to “just look.”  The access of credit cards and impulse financing make it too easy to make a financial mistake.  By not looking, you avoid the impulse and temptation to stray from your financial plan.

Avoid Another Monthly Payment Advice #2 – New Things Do Not Bring Happiness.  How many times do we believe that when I get this new car, phone, computer, etc. then it will make me happy and content?  We purchase the item and it does make us happy, but only for a very short time.  Then, we are on to wanting the next item.  The simple realization that buying more does not bring happiness, then it makes it easy to say no.  Instead of looking for happiness in shopping, find something constructive to do.  Take a class, exercise, walk in the woods, read a book at the library, or find a quiet place and just relax.  Understanding that purchased items will not make you happy is a big step that will help you avoid debt.

Avoid Another Monthly Payment Advice #3 – Pay Off Your Existing Monthly Payment.  One of the best ways to remain out of debt is to accelerate your existing monthly payments if you find something that you truly want.  Want a new car?  Then pay off your existing car quickly so you can purchase a new car.  The act of retiring old debt before taking on new debt keeps your personal budget and finances in alignment with your goals.  Debt happens when we over extend our monthly payments so less and less of our monthly income is available for necessities and emergencies.  Then, an emergency happens, we do not have the savings to deal with the emergency, and the monthly payments get even higher.  Paying off your existing debt ahead of schedule before taking on new debt keeps your debt levels and financial obligations in line.

Avoid Another Monthly Payment Advice #4 – Expand Your Emergency Fund.  Expanding your emergency fund seems to be one of the least exciting and certainly least satisfying things that you can do with your income.  You have items you want to buy, bills you want to pay down early, and you have to set even more money aside in case something “happens.”  Building your Emergency Fund larger helps you to be prepared for even larger financial emergencies.  A roof repair, a health emergency, and even a major car repair can throw monthly financial obligations into massive disarray and start down the path to serve personal debt.  A larger Emergency Fund, although unexciting, is the best way to ensure a one-time negative financial event does not lead to a personal debt emergency.

Avoid Another Monthly Payment Advice #5 – Creative Store Financing Is Not Your Friend.  Most store sales people are well prepared for the arguments of emergency funds, holding down debt levels, and just saying no.  However, the sales pitch is usually something like a perfect dream.  You use the store financing, drive home with the item today, and then the financing does not start for another eight months, or has very low initial rate, or the item can be returned with “no questions asked.”  These financing methods sound great, but that is where the greatness ends.  Ultimately, these unscrupulous financing methods compound your personal financial debt and do not erase the debt burden.

Avoiding additional monthly payments are one of the key ways to remain on your budget and on your financial plan.  Refusing to shop for items you cannot afford, realizing new things do not bring happiness, paying off existing debt, increasing your emergency fund, and saying no to store financing are the best ways to keep additional debt in check and your financial goals on track.


‎02-13-2017 07:10 AM

Content provided courtesy of USAA.

By Chad Storlie


Easiest Way to Raise Your Credit Score

Have you had a financial setback? Maybe you need to raise your credit score? Maybe you don’t have much of a credit history and need to establish one?

Not an Access Card

Believe it or not, opening a Fingerhut Credit account is one of the fastest, easiest ways to re-establish your credit once you’ve had financial difficulties and it’s a great way to build credit when you have none. Unlike other creditors, Fingerhut typically approves most people for an initial credit line of approximately $300.00 (or more), and in the rare event that you aren’t approved, Fingerhut even has a special program called the “Fingerhut Fresh Start” program where you may still qualify for an account.

How does opening a Fingerhut help your credit score?

Actually, opening a Fingerhut account helps your credit score in several ways – first and foremost, when no one else will extend credit to you, the ease of opening a Fingerhut account makes it easy to start improving your credit score. Then, once you’ve got your account, having “available credit” helps your credit utilization score, and your regular payments helps re-establish your payment history. (Fingerhut reports your available credit and payment history to the credit bureaus every month.) Even better, over time you’ll see regular credit limit reviews (and possibly sizable increases), and special financing deals on things like electronics, furniture, and large appliances (no interest deals, deferred payment deals, and more).

How long does it take to open a Fingerhut account?

Opening a Fingerhut Credit Account issued by WebBank is as easy as entering your name and address and find out right now. That’s right, just answer a couple of simple questions, get an instant decision, and you can place your first order today!

What can you buy at Fingerhut?

Unlike most catalog shopping sites, Fingerhut offers hundreds of thousands of name brand products in categories like clothing, shoes, electronics, sporting goods, toys, computers, gaming systems, furniture, appliances, and more!

So, what’s stopping you?  Are you ready to improve your credit score?

Easiest Way to Save for Vacation

Spring and summer are just around the corner… and that means your annual vacation is just around the corner too!

Have you started saving for vacation?  Maybe you’re planning to hold onto your annual tax refund money and use that for vacation?  Or maybe you’re looking for something else?  Well, here’s an easy way to save for your vacation AND work on your credit score while you’re at it!

Instead of putting that tax refund into a savings account, why not use it to make the security deposit on The First Progress Platinum Elite MasterCard® Secured Credit Card ?

Not only will using your tax refund this way ensure that you’re putting that money away for your vacation, but you’ll also establish a brand new credit card with an available balance that’s equal to the security deposit that you put up when you open the account, and an open account with available credit looks great on your credit report!

You can even save more for your vacation… just put more money into the security deposit whenever it fits into your budget!  When it’s time for vacation, you’ll have the funds you need AND you can make payments on the card (regular payments improve your credit score, too).

What could be better?  Opening The First Progress Platinum Elite MasterCard® Secured Credit Card  with this year’s tax refund is truly a win-win situation!


Adulting 101: Make These Money Moves First When You’re Out on Your Own

Being on your own for the first time and managing your money can be scary. Relax. You don’t have to be a Wall Street pro by the time you draw your first paycheck. JJ Montanaro, a CERTIFIED FINANCIAL PLANNER™ with USAA, recommends these three first steps:

Understand your pay stub

Review your paycheck. Note your pay and allowances, along with withholdings. They’re important when you build a budget, file taxes and plan for future savings. If you have questions, ask your chain of command. Also, visit for more money help

Create a budget

First, track expenses for a month, including little things like dining out, movies, coffee and impulse buys. Next, set up your monthly budget so you spend less than you earn. List income and what you spend on rent, car payments and other items. Get help from the USAA® Money Manager at

Start an emergency fund

Put away a little extra each month — say $50 — and aim for $1,000 total so you may avoid being in a bind when unexpected expenses hit. It adds up quick when you pay into your emergency fund first. Keep the fund in a separate savings account so you’re not tempted to dip into it. Track your progress at


‎01-23-2017 07:00 AM

Content provided courtesy of USAA.