As I write this column, all of our family has joined us out of town for the Christmas and New Year’s Day holidays. Four kids, two husbands, one fiancé, four dogs (plus our two dogs), two cats and maybe a partridge in a pear tree. No grandkids yet, and no pressure. We were married ten years before our oldest, Missy, blessed us. Everyone is working remotely (including Phyllis and me) and silence is in short supply!

I am so thankful to have this rare time together, no matter how many things are on all of our collective work lists. Phyllis and I take deep breaths and enjoy having everyone together. Phyllis is the master organizer and Christmas is her favorite time of the year. We both just keep working as we can while juggling the family!

Our Christmas gifting has shifted this year to totally Secret Santa for all of us. In prior years, it was just the kids, but now it just makes sense. One special gift limited to a budgeted amount shifts the focus from the gift to the person. Everyone has to really think and research, if you will, what best suits the recipient of their special gift. I can’t wait for Christmas Day.

We give regularly to our church and other favorite charities. This time of year we review our tax status and consider some special charitable gifts. I have said this in a previous column, you will never miss the money you give to those in real need! I encourage you to do the same.

We have tried to instill a planning mentality within our family. Phyllis and I were fortunate to have had parents that provided for us. In reality, our parents really sacrificed and planned for us so we received the education we needed without the burden of debt. They also instilled in us a strong work ethic during our formative years, expecting us to work for our spending money, which we both did.

We endeavored to do the same for our children. We started saving on a regular monthly basis as soon as we could after they were born. This paid off as we had what we needed for them to attend college with a little “get to work” money after graduation. Missy graduated from high school in 2008, a bleak year for the markets, but it worked out. One of our daughters went out of state for college, which threw us for a loop, but it also worked out.

Over our careers starting in 1979 and 1980, there have been a number of bleak times in the markets, but when you keep a long term perspective and stay consistent in your savings and investments, things seem to work out. Just for grins, Google what inflation and mortgage rates were in 1980.

Have a financial plan. If you don’t have a plan, make a plan! Make sure you have a good CPA that understands your needs. In addition, make sure you have a CERTIFIED FINANCIAL PLANNER™ professional that places your best interest ahead of their own.

I hope you have a wonderful holiday and a great 2023!

Published in the Victoria Advocate

Lane Keller CPA/CFP® is a managing member of Keller & Associates CPAs, PLLC and KMH Wealth Management, LLC.

I’ve never had more to be thankful for this Thanksgiving – I have my whole family. Six weeks ago, I almost didn’t. My 4 year-old caught the flu last month and required a visit to our rural ER. Unbeknownst to us, he was in critical condition with a collapsed lung and a cascading list of complications. Ultimately, he required helicopter transport to a larger hospital where he was admitted to the Pediatric ICU and released 4 days later. Although I am sifting through over $150,000 in medical bills, this Thanksgiving I’m lifting praise and thanksgiving that we still have our son.

When surprise medical bills suddenly take dominance over your financial life, it quite literally pays to understand your rights and your payment options. I’d like to share with you the knowledge I’m employing to navigate our flood of medical bills. First, I have come to expect billings errors. I review medical bills closely and request an itemized bill if I have questions. Keeping accurate records will help if I need to file a billing dispute.

If you are covered under group or individual health plans, the No Surprises Act protects you from receiving surprise medical bills for most emergency services, non-emergency services from out-of-network providers at in-network facilities, and services from out-of-network air ambulance services. While my provider and my insurer work to settle the $46,000 helicopter bill between each other, I know that I am only required to pay up to my out-of-pocket maximum for the policy year.

To avoid exceeding my out-of-pocket limit, I pay medical bills in the order the claims are filed with my insurance company – not in the order received through the mail. Insurance companies process claims in the order they are filed. If I pay a bill out of order and jump ahead, my insurer can’t help and chances are I will have to fight the provider for a refund. You can log into your health insurer’s online portal to see a chronological list of claims. I keep that list, along with accurate records of the bills I receive, and those I have paid. As I approach my out-of-pocket limit, I may face a $1,200 bill, but only have $500 left to reach my out-of-pocket limit. At that point, I will contact my insurer to compare records. They will likely ask me to contact the phone number on that bill (and possibly all remaining bills) and request the provider to resubmit the claims.

In all cases, cash is king and gives you negotiating power. This can be helpful if you do have insurance, but don’t expect to reach your out-of-pocket limit for the year. I personally have saved thousands of dollars on medical bills for something as routine as childbirth, simply by contacting the billing department of the service provider and asking “What discount can you offer if I pay in full?” You may be surprised with a substantial discount.

Be mindful of the implications of medical debt on your credit. Most healthcare providers don’t report to credit bureaus; your bill would likely be sold to a collection agency before appearing on your credit report. After the bill goes to collections, the three main credit bureaus provide a 365 day grace-period to resolve the debt before the collection account appears in your credit history. Utilize that grace period to work out a payment plan with the provider that works for your budget, or negotiate with the collector who can typically offer steeper discounts than providers.

When considering the lifelong impact of surprise medical costs on your long term financial plan, knowing your rights and your options can save you tens, possibly even hundreds of thousands of dollars. A CERTIFIED FINANCIAL PLANNER™ professional can help you understand the nuances of health insurance and develop a plan to pay off all types of debt. If you believe you have been wrongly billed, you may contact the Department of Health and Human Services (HHS) at: 1-800-985-3059 or visit www.cms.gov/nosurprises to learn more about your rights and your options.

Published in the Victoria Advocate

Hannah Gohmert is a CFP® professional and the Chief Compliance Officer of KMH Wealth Management, LLC.

Unbelievably, year-end is right around the corner. The first line of business in January 2023 will be to file and issue any necessary Form 1099s. Although I am fairly new to the profession and my role as a CPA, I have quickly come to realize that taxpayers do not particularly like sending or receiving 1099s. Business owners and clients often do not collect the required information to accurately or timely issue a 1099. This leaves taxpayers and their accountants in a fury to gather information by the filing deadline, January 31st. There are some misunderstandings surrounding this tax task that I’d like to help clear up and make your 1099s one less problem in the New Year.

Who Should Receive a 1099?

The IRS requires individuals and businesses to file Form 1099, which is an informational return, to inform the IRS that they have paid $600 or more to someone who is not an employee, during the normal course of business. You are required to issue a 1099 to “non-incorporated” vendors or contractors, meaning individuals, partnerships, Limited Liability Companies (LLCs), Limited Partnerships (LPs), estates and trusts.

For example, a rancher who pays an LLC for machine hire to harvest or plant, must issue the LLC a 1099-NEC for the services provided. Additionally, this rancher may pay for a pasture lease; as the lessee, they will issue the lessor a 1099-MISC for rent. If the rancher’s livestock requires attention at the local veterinarian clinic, the rancher’s payment for the vet services could require a 1099-MISC. Essentially, if you are deducting the services or rental expenses on your tax return, you will likely be required to issue a 1099 for payments of $600 or more.

How to Collect Information from Vendors?

It appears that the issue surrounding Forms 1099 is collecting the necessary information to accurately report the form. You may ask, “What exactly needs to be reported?” You are required to report the name, address, tax I.D. number (Social Security number or EIN) and the total amount paid to the recipient. The IRS holds the stance that it is the taxpayer’s, or issuer of the 1099’s, responsibility to collect this information from vendors before payment is made.

To ease this responsibility, request Form W-9 from any vendor or contractor if you believe there is chance you will issue them a 1099. Form W-9, or formally titled “Request for Taxpayer Identification Number and Certification”, will provide you with the tax I.D. number, address and indicate if they are incorporated. Instilling this practice in your normal course of business will ensure you have all the essential information on hand, should you be required to issue a 1099 after the start of the year.

The Price to Pay

Yes, it may be a hassle to collect this information upfront, but the risk of not filing or inaccurately filing Form 1099 is too great. The IRS now requires taxpayers to answer questions on their tax return to indicate if they were required to issue Forms 1099, and if so, did they file the required forms. Under penalty of perjury, you must indicate that your tax return is accurate and complete. If you answer “No” to the latter question, you may be subject to penalties and fines varying from $50 to $270 per form, depending on how late the 1099 is filed. If a taxpayer intentionally disregards the requirement to file, a minimum penalty of $550 per form can be imposed. Always keep filing and issuing documentation with your tax files.

Mark January 31st, 2023 on your calendars, as this is the deadline to file and mail Forms 1099 for the 2022 tax year. Do not let the deadline come and go, leaving yourself wishing you kept better records throughout the year. If you have any questions about Forms 1099, reach out to your trusted CPA.

Published in the Victoria Advocate

Carlee H. Gibbs, CPA is a staff accountant for Keller & Associates CPAs, PLLC.

Finding someone you can trust with your money can be tricky. Go online and search “financial advisor near me” and you’ll get dozens of results. The search results will all seem to have a common theme: financial advisor, wealth management, etc., but as a consumer what do all these terms really mean and how can you differentiate one from the other?

Did you know that anyone can hold themselves out as a financial advisor? That can be a scary thought when you begin to look for someone to help you with your life savings. Hopefully the following story about ‘suit shopping’ will help you to remember the differences between the options available to you within the finance industry.

John has an important event coming up that he’d like to buy a suit for. He’s never purchased a suit so he calls his sister Jill to ask where he should start. Jill first tells John that there’s a lot of information and videos on the internet about how he could sew a suit himself. He only needs to go to the store, buy some fabric, and figure out his measurements. John tries this route, only to discover that he does not have a talent working with textiles. He’s left with random pieces of fabric that don’t work for him and is frustrated from wasting time and money.

Do-it-yourself (DIY): Maybe you feel the same way about managing your money: you see others do it and are self-proclaimed experts, why not you too? Like John DIY’ing his suit, you may decide to DIY your investments. This may turn out okay for you or maybe you end up like John. Unsure of your measurements (i.e. goals, risk tolerance, overall market knowledge), you piece a portfolio together. Before you know it, you are several years into investing, regretting your decisions and holding random investments that don’t fit.

After John’s failed suit making debacle, his sister suggests that he head to a department store to see if a salesman can help him find a suit. He goes to a name brand store, finds a salesman whose job is to place John in a suit that he can wear. He does just that, but the salesman doesn’t take the time to see if the suit fits John well. The sleeves are too long, his buttons are too tight, and it is in a color that John doesn’t care for. Nonetheless, the suit salesman has done his job and still gets a commission for the sale.

Broker/Financial Advisor: Relate John’s department store visit to that of a broker/financial advisor. Similar to a department store, a broker’s business may have name recognition and you may see the same business in most major towns you travel through. Similar to that of the store salesman, a broker’s job is to make sure that your investments ‘fit’ or are suitable for someone your age. This means that while decisions made may not be specifically best for you, a broker is doing their job. Also similar to that of the suit salesman, they will also make a commission for each ‘sale’ they make.

When John goes to his sister’s house to show her his purchase, Jill regrets her decision to send him to the department store. The suit John bought simply won’t work. Jill sends John to a tailor to make John a custom suit. The tailor takes John’s measurements, asks his preferences on fabrics and colors, and asks him to come back once the job is complete for final changes. When John and Jill return, the suit fits John perfectly and both are satisfied.

CERTIFIED FINANCIAL PLANNER™/Fiduciary: Just as the tailor in John’s story, a CERTIFIED FINANCIAL PLANNER™ professional must provide work that is custom to a particular client; not their neighbor, friend, or stranger on the street. A fiduciary is required by law to act in accordance with your best interest, not their own. Decisions are custom to a client and are not driven by sales or other potential conflicts of interests.

Whether it be a suit or investments, everyone’s needs and preferences are different. You may be confident in your abilities of some areas of your life, but also accept that there are others you may need to seek an expert’s opinion. If you find yourself shopping for someone to manage your money, I encourage you to ask yourself, ‘Do I have the right suit maker?’

Published in the Victoria Advocate

Sara Potts is a CFP® Professional and Operations Manager with KMH Wealth Management, LLC

A lot is running through your mind when you leave the hospital and bring home a new baby. Whether it is your first, second, etc., or last child, making sure that your beneficiary designations are up to date is likely not a thought on the forefront. Between bottles, diapers, and baby snuggles, it can be easy to forget or delay reviewing and updating your beneficiaries. As a mom to a new baby, I can attest to how easily this important estate planning task can be sidetracked by the more pressing concerns that a newborn brings. New parent or not, let this article be a nudge for you, or share as a healthy reminder to someone you know.

Many of your account’s beneficiary designations can be adjusted during a midnight feeding through your online portal for certain institutions. Others may require specific paperwork that needs to first be requested. You may need to wait until baby’s social security number has been received to submit, but don’t let that keep you from starting. Start at the top of the list and update beneficiaries on each account with baby steps.

• Work Retirement Plans
• IRA Accounts
• HSA Accounts
• Life Insurance policies
• TOD/POD Investment and Bank accounts
• Will and designated guardians

You may run across labeling whether a person/entity/charity is a primary, contingent, or tertiary beneficiary. This is simply listing an order of who will claim to inherit your assets based on who is alive at your passing. A tier of options. Primary, as the name suggest, will be first in line. A contingent or secondary beneficiary, replaces the primary in their absence or if they choose to disinherit. A tertiary beneficiary will inherit if your primary and contingent options are not living or not willing to accept.

“Per Stirpes” is an additional option available for you to add on one or more of your designees. If you want your assets to flow down a branch of the family equally, in the event of a beneficiary dying before the account owner, consider adding per stirpes. For instance, if one of your primary beneficiaries dies before you, their share of your account will pass to their descendants. Without this additional Latin lingo, all living beneficiaries (on the same tier) will split the inheritance of predeceased beneficiary, potentially cutting out a family line.

An infant and a 15 year old are both minors. They will each need to have an adult act as a custodian on their inherited account in the unfortunate event of your death. Many broker-dealers, banks, and insurance companies allow for a custodian of a minor to be appointed on beneficiary paperwork. Who do you trust to act as a financial guardian of funds left for your child’s benefit? This can be the same or different person that you have named as actual guardian of the minor in your will. Once the child reaches the age of majority (age varies per state), they will be able to accept the account as their own.

Each institution that holds your assets will have a default if you do not fill out their beneficiary form. This could mean that your retirement account may go to your estate and your children could lose significant tax benefits. With baby steps, updating beneficiary designations can be easy to do – the challenge is often remembering to do it.

Published in the Victoria Advocate

Beth Koonce is a CFP® Professional and Lead Advisor with KMH Wealth Management, LLC.