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CPA & Financial Advisor Update

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This is the third year that my hubs and I will file as “married filing jointly” for tax purposes. At the start of the new year, I thought it would be a great time to get some financial affairs in order. I set up meeting/consultations with a CPA and with a financial advisor. While I wasn’t “sold” on either of their services at this point (I think I want to have consultations with a couple other folks, too), the meetings did give me lots of fun ideas that have been swirling around my head.

Financial Advisor Meeting

First – I’ve got to open up a Roth IRA. My dad was a financial advisor when I was young and that was the most salient financial tip I remember ever getting from him – to open and fully fund a Roth IRA. Unfortunately, I went to college, got 6-figure debt, and never did follow his advice.

Meeting with the financial advisor last week, that was his tip that I’d like to implement – open a ROTH! It’s time! It’s BEYOND time! He also recommended some type of “investment” strategy operating through life insurance. I’m very leery about that as financial advice and have no plans to do that. I currently have 20-year term life insurance and hubs has a policy through work. We’re happy with our coverage.

CPA Meeting

The second idea came from the CPA and is not something I plan to implement right now, but is a fun idea for down the road to reduce our taxable income and help set my girls up on the right foot, too. The idea is for us to open an LLC and pay our kids to help us with the business.

According to 2022 guidelines, kids can be paid up to $12,950 without paying any taxes on the income. The first $6,000 of that can be put directly into a Roth IRA in the child’s name, to grow tax-free throughout their life. We already have 529 savings for the girls’ educational expenses, but it would be nice for them to have a Roth given that it doesn’t have the same restrictions for qualifying purchases.

Right now there’s no plans to open up a business. But I could see this being something I look into in another couple years (after I’m debt-free and more focused on financial growth). I already have an idea for an internet-based company that can easily be done part-time and the girls can really help with it. Whatever I pay them reduces my taxable income, as well.

What are your thoughts? Do you pay for financial advising and/or tax preparer/CPA services? Any critical pieces of advice to share?


One Comment

  • Reply csdx |

    That first ‘financial advisor’ sounded more like an insurance salesman. There’s really no benefit to bothering those whole life schemes in retirement vehicles, it’s already tax advantaged. A good question to ask financial advisors when you talk with them is if they are a fiduciary.

    I’m not planning on trying to make a company just to pay my kids, but while they’re under 18 we’re planning to match their income they make from baby sitting or summer jobs into an IRA.

So, what do you think ?