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Year end tax tips

December 17, 2014

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

2014 will soon come to an end.  With the end of the holiday season comes the beginning of the tax season. There are steps you can take now to start preparing for tax season and maybe even save a little more on taxes.  Here are a few easy to understand tax tips to give you a boost before tax season arrives:

Maximize retirement contributions.

  • Make additional contributions to your 401k or 403b before December 31, 2014. These contributions are usually tax deferred. The contributions you make in 2014 are not included in your taxable income.  So, your income tax will be figured on a lower amount.
  • Start or contribute to an Individual Retirement Account (IRA). Traditional IRA’s are tax deferred.  You can make these contributions up to April 15, 2015 and count it for the 2014 tax year.  Limits are typically up to $5,500 per tax filer or $6,500 for those over age 50.

Give to charities. Many people give to charities throughout the year.  You have until December 31,2014 for your charitable contributions to be counted as an itemized deduction for the 2014 tax year.  To take the deduction, you must itemize your deductions using IRS form 1040A.

  • Follow the rules for qualifying deductions – The recipient must be a qualified charity. You’ll need a receipt or letter of acknowledgement if the donation is more than $250. Verify donations under $250 with the cancelled check or a bank statement showing the contribution.  Special rules apply to the donation of a car, boat, or airplane.
  • Check out the charity at the Arkansas Attorney General’s database – All charities that solicit donations in Arkansas must register and file annual informational returns with the Attorney General. Check the database before you donate to make sure you are giving to a reputable charity. You can also see how much of your donation goes to administration or fundraising costs.


Organize for tax filing.

  • If you haven’t already done so, now is a good time to start organizing your tax documents so you won’t have to scramble at the last minute. If you’re planning to itemize, this will include amounts paid for childcare, charitable donation receipts, medical and dental expenses and other deductible expenses.
  • Set up a folder or envelope to collect incoming tax documents. Organizations will soon begin sending year-end tax documentation such as home mortgage interest statement, interest income, and W2s. Some charities send letters of acknowledgement of donations you’ve given throughout the year. As you receive statements in the mail, place anything related to taxes in the folder or envelope you prepared.
  • Consider your filing options. Tax filers who made less than $60,000 in 2014 can use IRS Free File.  For a faster refund, submit your taxes electronically and have your refund deposited directly into your bank account.  Free options for filers who need assistance are Volunteer Income Tax Assistance (VITA) for filers who made less than $53,000 and Tax Counseling for the Elderly (TCE) for filers age 60 and older. To locate the nearest VITA or TCE site near you call 800-906-9887 or use the VITA Locator Tool at

Laura Connerly, Ph. D.

Assistant Professor – Family and Consumer Economics

University of Arkansas Division of Agriculture Cooperative Extension Service

The Cooperative Extension Service is your source for reliable, research-based information to improve quality of life. Discover the latest recommendations for money management, nutrition, health, parenting, relationships, and personal development. Learn more at

Teaching your kids about money

November 26, 2014

Here’s a great idea

“In today’s increasingly complex world, financial literacy is more important than ever.  Children learn about money from their parents. Start your child on the road to financial success by talking to her about good money management.”   Laura Connerly, Ph.D.

In other words

Fees and disclosure statements, mortgage loans, credit scores – financial products are not always easy to understand.  How can we help our children grow into smart consumers?

As a parent, you are your child’s first and most important source of information about financial management.  Be intentional about teaching good money management skills.  Involve your child in conversations about finances. When talking to your kids about money; remember to have a positive attitude, use age-appropriate concepts, and encourage responsibility.

How this applies to you

Here are some important concepts to discuss with your budding consumer. Income and Expenses – Your child doesn’t have to know exactly what you make or owe; but they need to have a general understanding of the main sources of family income and the main expenditures.  Needs vs. Wants – “Needs” are the things that are necessary for survival such as food, shelter, and clothing.  Most other items are “wants”.  Pay for needs before you buy wants. Spend, Save, Share – These are the basic components of a good budget.  The rule of thumb is to spend 80%, save 10%, and share 10%.

To find out more

Watch Dr. Connerly’s Kids & Money video at:

Black Friday Shopping Tips

November 26, 2014
  1. Is it really a bargain? Know the real price. Is it something you really want or need? Is it a quality product?
  2. Plan ahead. Check ads in your local paper or online. Store websites sometimes have additional information and coupons.  Load store apps on your smart phone so you can check for last minute deals and updates.  Make a shopping list in advance.  The list can be people for whom you’re shopping or a list of items that you want to purchase.  Set a spending limit in advance so you’ll be less tempted to overspend.
  3. Read the details. Door buster items or big discounts may be “while supplies last” or limited supplies only. Some stores don’t offer rainchecks on Black Friday.  Find out which stores offer price matching on Black Friday and take advertisements with you.  Sometimes you can save time by asking for a price match of an item that’s on sale somewhere else.  However – some stores that typically offer price matching may not do so on Black Friday.  Be sure to know the store’s return policies.
  4. Pace yourself. Plan ahead to know when stores open and where you’ll go when for the best prices. Some stores open on Thanksgiving evening, some at midnight, others might offer “early bird” specials. If your most important purchase is “while supplies last” you might want to plan to go to that store first and be in line early. Save some room in your holiday budget for future purchases.  Remember, there are still bargains to be had at:
    1. Small Business Saturday – enjoy supporting local businesses and find unique items
    2. Super Sunday
    3. Cyber Monday
  5. Shop online. Many retailers also offer Black Friday deals to online shoppers. Some online companies don’t wait for Cyber Monday but also offer Black Friday sales. Some companies offer free shipping. If not, consider if the item is still a bargain after you add the cost of shipping.
  6. Consider your best form of payment. Typically credit cards offer better consumer protection against fraud. Limit the cards you carry. If you carry cash, keep an eye on your purse or wallet. If you use a debit card, protect your PIN.  If you use credit cards, limit spending to what you can repay in a reasonable amount of time so that you don’t end up adding to the cost of your purchases with months of interest charges.
  7. Combine Discounts -store sales plus coupons and even manufacture coupons or rebates can add up to your biggest savings.
  8. Beware of impulse buys. Advertised sale items are designed to get you in the door.  Store displays are designed to prompt impulse buys.
  9. Shop safely. Be conscientious about your personal safety.  Shop with a friend or with a group.  Be aware of your surroundings. Park and walk in well-lighted areas.
  10. Keep your receipt. Compare it to your bank statement or credit card statement. If the item is going to be a gift, be sure to ask for a gift receipt.


It’s not about communication

November 25, 2014

Here’s a great idea…

In their book, The Marriage Garden, Wally Goddard and James Marshall say,
“We live in a world where individual’s wants and needs take center stage. All of us are concerned about ‘me’ and ‘my rights’ or ‘what makes me happy.’ We must look out for ourselves. But if this tendency is not balanced with a desire to connect with others and serve them, than we become isolated and lonely. Happy lives and good marriages involve service and sacrifice.” (p. 146)

In other words …
Service is a vital part of a healthy relationship. Acts of serving our partners as well as serving others in our communities are important. In fact, when couples serve together, they get double benefits-both the blessings of companionship and the joy of service.
Here’s how you can use this idea to have a better life …
Find ways to serve. Perhaps you can rub your partner’s shoulders or offer to take a chore that is normally theirs. Find ways to serve in your community together. Maybe you could help a child read, pick up trash at the park, or serve in a soup kitchen. Finding more ways to serve will bring more satisfactions to your relationship. Right now think of a way to serve your partner or serve with your partner.
To find out more…
about couple relationships, check out our FREE resources: The Marriage Garden or theGetting Our Hearts Right programsat, follow us at or contact your local county Extension agent. You may also like to read How to Improve Your Marriage Without Talking About It.

The first step to change is awareness

November 25, 2014

Here’s a great idea …

In the book Small Steps to Health and Wealth, we learn about small actions that can lead to successful behavior change for improving health and increasing wealth.  Author Barbara O’Neil stated, “No step is too small to get started and you can never be too early or too late.”

In other words …

It’s easy to disconnect from the reality of financial and health practices.  This disconnect is denial and it can be a real problem if you’re trying to improve your health or wealth.  In fact, awareness is necessary for behavior change.  So, the first small step toward successful change is to recognize your current situation and practices.

Here’s how you can use this idea to have a better life …

Ask yourself if you are in denial. Look at the visible evidence. How’s your credit score? Is your debt load less than 20%? Do you have a positive net worth? Are you a healthy weight? How’s your blood pressure?

Keep written records. Record spending for two months. Most people don’t have a clue how many dollars they spend monthly on incidental expenses such as food and entertainment. Keep a diet journal and record everything you eat for two weeks. Identify needed changes. Use your written records to find areas where change is needed.

To find out more …

Watch a video about Small Steps to Health and Wealth™ at:

Learn more about strategies for success at

It’s not about communication

November 25, 2014

Here’s a great idea…

In their book, How to Improve Your Marriage Without Talking About It, Patricia Love and Steven Stosny say,

“The real reason the woman wants to talk about it [the relationship]-beneath the resentment and frustration-is that disconnection makes her feel anxious and, on a deeper level, isolated and afraid. The real reason the man doesn’t want to talk about the relationship is that her dissatisfaction with him makes him feel like a failure. On a deeper level, he feels ashamed. His shame is too great to allow him to understand her fear, and her fear keeps her from seeing his shame.” (p. 2)

In other words …

Women want to talk about “the relationship” because they want to resolve any issues that might prevent the closeness and security they feel with their spouse/partner. Men don’t want to talk about issues because they make them feel incompetent in their ability to care for and protect their partner/wife. These misunderstandings drive wedges in a couple’s ability to connect and feel close to each other.

Here’s how you can use this idea to have a better life …

The next time you feel resentment towards or frustration with your partner, choose compassion instead of defensiveness. While resentment makes you devalue the contributions of your partner by avoidance or attack, compassion moves you to improve, appreciate, connect, and protect. As compassion and support are given regularly, you will feel valued and your feelings of resentment and frustration will dissipate.

To find out more…

about couple relationships, check out our FREE resources: The Marriage Garden or the Getting Our Hearts Right programs at, follow us at or contact your local county Extension agent. You may also like to read How to Improve Your Marriage Without Talking About It.

Our partners deserve more than leftovers

October 20, 2014

Here’s an idea…

In their book, The Marriage Garden, H. Wallace Goddard and James P. Marshall say, “With many demands on our time, sometimes our marriages only get cold leftovers from last night’s dinner. Marriage may get only small fragments of spare time and energy. This is likely to leave the relationship feeling starved and empty” (p. 30).

In other words…

We need to make time with our spouse a priority. Before we take on new tasks and hobbies that may take up our time, we need to consider how these may affect our relationship with our partners. Time together doesn’t have to be elaborate dates or expensive trips. Doing simple things at home together consistently are much more important than the “romantic getaways.”

How this applies to you…

Make time for your partner, it doesn’t have to be expensive or a huge effort, just do little things together and they will have a big influence on your relationship. Find something to do together that you both enjoy.

To Find Out More…

For an excellent (and free!) program on marriage, see The Marriage Garden or Getting Our Hearts Right at

For an excellent book focused on marriage, read The Marriage Garden by H. Wallace Goddard and James P. Marshall.With many demands on our time marriage gets cold leftovers


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