Banking on Student Loan Forgiveness? Do this.

This CNBC Money article has up-to-date advice on how to be sure your forgiveness plan will work:

  1. Make sure you’re in a William D. Ford Direct Loan Program — the key word is “direct.”  You may be able to consolidate other federal loans into a direct loan.
  2. You must be in an income-driven repayment plan.  Graduated & extended plans don’t qualify.
  3. Your employer must qualify: government at any level, 501(c)(3) nonprofits and some others.
  4. Forgiveness is only available after 120 payments, not necessarily consecutively.
  5. Submit the Employment Certification Form annually.  See here.  While not required, it may head off problems.

Call or email if you want to talk about the implications for your personal financial plan!



Has my identity been hacked? What should I do?

The Equifax hack on top of all the others has many of us anxious.  As the internet meme goes “They had one job.”  (They failed.)  Equifax, as a credit reporting agency, held what I call the “ID theft kit,” name, date of birth, Social Security Number, birthdate, driver’s license, addresses current & prior, and credit account numbers.  I have pretty much the same quality of data.  That’s why I’m so careful with my security procedures!

People are asking how to find out if they were affected.  You can ask Equifax on their website or phone, but they’re making up the answers (see media reports).  If it’s 143,000,000+ people, I think it’s reasonable to assume that we all were.  The US population of 300 million includes children, seniors and folks who have no credit records.  The Equifax hack could cover pretty much everybody else.

So, what now?  All your information is out there for sale on the dark web.  A Yahoo! Finance story indicates there’s proof of an uptick in fraud attempts already.

My suggestions:

  • The key step to take now is to put a CREDIT FREEZE on your accounts with Equifax, Experian, TransUnion and CBC Innovis.
    • It’s not free, except at Equifax (for the next 30 days). Expect to pay $5-10 each unless you’re already an ID theft victim or 62+.
    • Keep the PIN you’re assigned in order to remove the freeze or “thaw” it.
    • You will need to thaw in order to apply for credit – a car, a house, a credit card — but it just takes a few minutes. So if you’re shopping right now, hold off, but get back & do it soon.

Equifax: 1-800-685-1111 (3) or

TransUnion: 1-888-909-8872 or

Experian: 1-888-397-3742

Innovis: 1-800-540-2505


  • Equifax has offered “free” ID theft protection for one year, but is taking credit cards for auto renewal. I don’t see a reason to pay them – or to trust them.  I’m skipping it.  You can buy ID theft monitoring from Lifelock or one of the other players, but count me unconvinced. (
  • Check your credit report free at Under federal law, you’re entitled to a report every year from each of the 3 major bureaus.  If you cycle them one every 4 months, you can be on top of it.
  • Then, don’t make it any worse. Practice safe habits yourself:
    • Password protect your computers, cellphones & tablets. Treat them like cash in public; don’t turn your back.  Then take care disposing of them and their stored data when they die.
    • Enable auto update to keep all software updated – especially operating system (eg. Windows) & browsers.
    • Password protect your modem & routers. Don’t use public wi-fi to access secure sites.
    • Use strong (long, complex, random) passwords and use them once. (Try a PW manager:,2817,2407168,00.asp)
    • Maintain anti-virus & anti-malware programs on all devices. (Yes, you might need to pay for that:,2817,2372364,00.asp.)
    • Set your browser to advise you of risky sites & then don’t visit them. Don’t click on pop-ups.
    • Don’t use unsecured email for sensitive information like SS numbers!
    • Never open email attachments unless you know exactly what they are and you’re expecting them from that person. Learn how to check the sender (
    • Use 2-factor authentication (which requires a texted or emailed code) on bank & investment accounts & anything really critical.
    • Back up your files periodically somewhere secure: on an encrypted drive or online.

The Federal Trade Commission (FTC) has lots of good info:

Please feel free to query me about my security procedures. And ask at your doctor’s office and *anywhere* anybody asks for your SS number or anything else sensitive!  I’ve seen incredibly sloppy procedures in the medical and banking fields  — and they have the “ID Theft kit” too.

Be careful out there.



Market’s High — What to Do?

The stock market has posted really strong gains this year; in recent weeks it’s hit all-time highs.  We don’t believe in timing the market, but we do believe in sticking with an asset allocation that’s consistent with our risk tolerance.  Right now, the gains in our stock position (individual stocks & stock mutual funds) have thrown us out of whack – we’re more exposed to the stock market than we like to be.


The coolest thing in rebalancing to a pre-determined asset allocation is that it forces us to sell high and buy low!  Do we always hit the top & the bottom? Of course not.  But we didn’t get creamed in 2008, we stayed in the market without having to sell as it declined, and were forced (by our allocation) to buy near the bottom & ride it up.  Now we’re selling out some of those gains to pull back our stock position and invest in cash like CD’s and in short- to medium-term bonds.

Many of you have expressed interest over the past year in working with us on aspects of your financial plan and the allocation of your investments – including your 401(k), 403(b), 457 or similar plan.

Do you have a plan with Specific, Measurable, Achievable, Results-focused, and Time- bound goals?

  • If you’re under 50, you should be contributing as much as possible to your retirement account(s), you should know how you’re going to pay for kids’ education (if any), and whatever other medium-term SMART goals you have.
  • If you’re 50+, it’s time to start looking at SMART goals for retirement.  How much do you need, when, what you need to do differently in the interim (or maybe continue doing right)?
  • No matter your age, you need an asset allocation that fits your risk tolerance.  At the top of the market is when big losses happen to those who are taking too much risk.  Get a check-up!

Call, email or go to to schedule an appointment.  We do have time to get started while we’re still in Fort Collins, so get in touch soon.  We can get yours started before we meet!  Just ask for a list of items to begin assembling.

Talk to you soon.

Year-End Tax Planning Tips 2016

It’s almost year-end.  Consider some planning opportunities to reduce your tax bill and increase any refund.  Let’s estimate your tax liability in the 4th quarter to best utilize some of these strategies.  If you have income without withholding, 4th quarter payments are due January 15th 2017 to avoid penalties.


  • Make charitable contributions before 12/31: Worthy causes abound!
    • Political contributions are not deductible, but many of your favorite causes may have 501(c)(3) entities that accept deductible contributions in addition to their political or lobbying arm. Watch for “legal defense & education” funds, etc., and the magic language – tax-deductible to the extent allowed by law!
    • Don’t forget that many of your museum, zoo, public TV & radio contributions may be wholly or partially deductible. Find that receipt or email; save the PDF & bring it or upload it to my portal.
    • Use envelopes &/or checks at church, temple or mosque and get the letter! Cash is not deductible, and a cancelled check is not enough for contributions over $250.
    • Check your cell phone bill if you do the $1 or $10 donation texts.
    • Document your volunteer service. Unreimbursed out of pocket expenses and travel/mileage may be deductible; your time is not.  There’s a form on the website at
    • Clear out the closets & basement; call or check the website for a worksheet to value donations.
    • If you’re over 70½ and taking required minimum distributions from IRA’s, the “qualified charitable contribution” has been made permanent. You can contribute directly to a charity from your IRA and not report the income.  For many retired folks, this can provide large savings.  Ask me how.


  • Review your investments. You may be able to take some gains at rates as low as zero percent, or reduce your taxable income by taking up to $3,000 a year in losses.


  • Some home energy credits have been extended through this or beyond. Contact me for details.


  • Timing: Many deductions and credits have income limitations or phaseouts.  And rates have increased the last few years for upper-income taxpayers.  You may lower the tax for one year or both if you:
    • Can defer or accelerate deductible expenses. Making your January mortgage and tax payments in December or paying outstanding medical bills may save tax – or not.
    • This strategy requires some planning, but can work for many people. With itemized deductions, shifting timing can save tax by taking the standard deduction in alternate years.


  • Reduce your tax & save for the future: Boost your 401(k) now, or anytime you get a raise – before you start spending it.  Or open an IRA if you don’t have an employer plan.  If you own a business, retirement plans offer a golden opportunity.  You can do an IRA up until April 15th, but some plans require action before year-end.


  • If you may owe, up your withholding before year-end and avoid underpayment penalties.


Employee Benefits Open Season:  If you still have time & want help determining tax benefits, call!


Post-Election Update:  The incoming administration in DC may result in major tax changes.  It’s possible that rates might go down for you, especially if your income is higher.  If you can push income off into 2017, it might be beneficial.  There have been numerous proposals for tax reform in recent years, but no movement due to the gridlock in Congress.  Some of these proposals could be beneficial.  Stay tuned.

FAFSA Season is Here Again! It’s a good time to think about college if you have kids.

For those of you with children in college or approaching college, the season for filing the Free Application for Federal Student Aid (FAFSA®) is here.  They’ve eliminated the last-minute scramble to file your tax return!  The 2017-2018 FAFSA will use information from your 2015 tax return.

If 1TaxFinancial prepared your 2015 return, we can provide a worksheet that makes completing the form a snap.  If you need one — or help filling out the FAFSA, please call.  The worksheet can also be completed for new clients with your 2015 return.

Note that if your income has changed significantly from the 2015 tax year, we can assist with an appeal for a professional judgment review in the financial aid department.

But even before you need to fill out the FAFSA, there are things to think about in getting financially ready for your child to attend college.  These issues are complicated:  college choice, income, and assets are all factors that determine how much you and your child will be expected to pay.  Now 1TaxFinancial can help with this process.  We have software that can estimate your expected contribution to your student’s education, and provide detailed college-specific information on the colleges your student is considering.  Reports start with the “sticker price” of attending each college and the need-based aid you can expect PLUS college-specific merit scholarships, tuition discounts, and other incentives offered.  These awards and discounts can be substantial and the information difficult for you to collect.  Having the full picture can help you make a better decision on the affordability of the college or colleges you are considering.

If you are a little further away from your student entering college, we can help then, too.  We can help you look at the potential costs and the best ways to save to help pay those costs.  The sooner you start putting money aside, the better your savings can put a dent in those expenses when your child is ready to start college.

Our basic college consulting service starts at $200, including the analysis of one college as discussed above.  Come work with us if your child is 2, 12, 16 or 20, but prime time for the detailed analysis is probably junior year of high school.

Jim Iverson CFA®
Cincinnati, OH 45213
513-794-1829 (o)
513-378-2203 (c)


“Mom, what’s a W-9?”  1099-MISC, W-4 Exemptions & More

It’s summer job time, time for new grads to find jobs, and it’s always a good time to take a better job!  But navigating the shoals of new hire paperwork can be hazardous.  I got this question just a couple of weeks ago from one of my own kids!

When you’re hired on at a new job, you normally have to fill out a W-4 and an I-9.  The first (and the state equivalent) require you to designate your number of exemptions for the income tax withholding calculation.  The latter, with your ID, proves your legal authorization to work in the U.S.

But sometimes you’ll be presented with a W-9 requesting your Social Security Number instead of a W-4.  Beware!  This employer is treating you as an “independent contractor” – a self-employed person – and will not be paying employment taxes or withholding income taxes for you.  They won’t be carrying workers’ comp insurance or providing any other benefits.  You will receive a 1099-MISC in January rather than a W-2.  If you’ll be making more than $1,000 or so, you could be in for a rude shock when tax time comes.

What are your options if you’re being treated as self-employed?

  • IRS and the states have rules about who qualifies as an independent contractor. There are 20 “tests” (here) but they add up to who controls the conditions of your work – the employer or you?  When do you work, where do you work, who decides how the work is done, whose tools & equipment are used, do you have a professional license/experience or do they train you, do you provide this service to multiple firms?  Are you paid for the work you accomplish – or hourly like an employee would be?
  • If you’re incorrectly classified, you can file the SS-8 with the IRS, and in the fullness of time you will receive a determination. Your employer will be in trouble, and you can count on being fired.  So for practical purposes, the only alternative if you want to retain the job is to put money aside and either pay quarterly estimated taxes or expect it to eat any other refund to which you’re entitled.  You’ll need to pay approximately 15% in addition to your income tax (on the first $118,500), but you may be able to deduct some business expenses.
  • Best to consult a professional, or use a calculator like the one here to make sure you won’t owe. You can make quarterly payments online at, or mail them to IRS in April, June, September & January.

If you *are* an employee, fill out your W-4 with care.  Basically, one exemption covers the standard deduction and personal exemption for a single person with one job.  If you itemize deductions, or have children (especially under 17), qualify as Head of Household or for Earned Income or other credits, you can increase it to 2 or more and have less tax withheld.  If you’re single with one job, you can safely use the worksheet on the W-4 form.  If you want a higher refund, reduce your exemptions to zero or add an additional dollar amount of withholding per pay period.

Common W-4 traps include:

  • Married couples – claiming Married can often mean owing, since the tables essentially assume you have a non-working spouse at home. If both of you have good incomes, beware. You may need to file as “Married but withhold at higher single rate.”  Consult a professional or use a comprehensive W-4 calculator like this one at to make sure you won’t owe.
  • Multiple jobs – if you work more than one job, each payroll calculation assumes that it’s all your income. But that $5,000 or $10,000 you make at your second job is taxed at your marginal (top) tax rate, which may be 25% or higher.  Again, consult a pro or use a calculator to adjust your exemptions; set them at Single – zero, and add a fixed amount, or see if your employer will withhold a flat percentage that corresponds to your top tax rate.

Remember, you must report all your income, even if you don’t receive a reporting form.  If you do receive one, IRS will be matching to make sure you report.  If you work in someone else’s home – providing childcare or other services – then you may be a household employee.  Your employer is required to withhold and pay employment taxes.  You can refer them to this info.

As always, call 513-794-1829 or email for a FREE consultation if you have questions.