Author Archives brooke

Eat at Home or Go Out?

The first and last weeks of the months are busy weeks for bmp, CPA. The schedule is jam packed with budget clients. There’s always a discussion on the grocery fund and the eating out fund. Particularly with single clients.

‘Isn’t it cheaper to eat out than to stay home and make dinner?’

At one point in time (during the recession) YES was the answer.

Today, the answer is NO.

For those of you curious as to how budgeting works in this case, both eating out and groceries are cash budget funds. Groceries is allowed more of the money than eating out.

See Restaurants Facing a Problem They Haven’t Seen Since the Recession for more information.

Tidbit – The Chance of a Lifetime!

That would be today.

And every day, if you’re up for it.

The things that change our lives (and the lives of others) are rarely the long-scheduled events, the much-practiced speeches or the annual gala. No, it’s almost certain that the next chance you have to leap will come out of nowhere in particular, and you’ll discover it because you’re ready for it.

Someone to inspire, to connect with, to lead. A system to transform. An idea to share. Responsibility is often just lying around, waiting for someone to take it.



~Seth Godin

Don’t Forget Fido!

My budget session yesterday was an eye-opening experience for my ‘first 30 days’ budget client. The conversation went like this –

Brooke – how’d the last 7 days go, Sam?

Sam – I completely forgot to work my dog into my budget so when I went to get dog food, there was no cash fund for it!

Brooke – So where did the money come from for the dog food?

Sam – I ate out of the freezer the last week because I used some of the grocery money for dog food.

Lesson – Don’t forget the expense of the family pet!

Now Sam has a monthly cash pet fund of $200:

$50 dog food

$15 dog nail trim

$15 pet insurance

$20 dog treats

$25 dog nutritional supplements

$25 dog collars/leashes/tags/beds/toys

$50 Training


Then we are pushing to the pet’s emergency fund every month $155:

$40 dog grooming ($80 grooming every other month so she’ll have $80 ready when needed)

$125 vet bills, heartworm prevention, flea/tick prevention, teeth cleaning


Sam was shocked at how much she spends on her pooch and is excited about the $155 a month push towards the future expenses. NO NEED FOR CREDIT CARD DEBT when you plan!


Click here for annual dog care costs.

What would happen?

Every morning we have Seth Godin’s blog waiting for us in our inbox. We take the first 5 minutes of the day to share our thoughts with one another. Great way to start the day. We encourage you to do the same by subscribing to Seth Godin’s blog at 

Godin’s Blog Thursday 10/13/16

What would happen…

if we chose to:

Get better at setting and honoring deadlines

Help one more person, each day

Sit in the front row

Ask a hard question every time we go to a meeting

Give more and take less

Learn to master a new tool

Ask why

All of these are choices, choices that require no one to choose us or give us permission.

Every time I find myself wishing for an external event, I realize that I’m way better off focusing on something I can control instead.


Deductible Medical Expenses

As we hit the final 30 days of this Presidential election year, the Affordable Care Act is mentioned more and more in the news, during political debates, and around kitchen tables. The conversation is leading to a ‘What medical expense can I deduct’ question to reappear over and over again in our email Inbox, phone calls, and events.

Medical expense deduction is only in play if you itemize your deductions and the deduction only applies to that in excess of 10% of income (under age 65) or 7.5% (over age of 65)

General rule – it’s not deductible unless prescribed by a doctor.

Deductible Medical Expenses include:

Insurance premiums for medical and dental care
Prescription medicines or insulin
Eye and medical doctor
Physical therapists
Medical exams – x-rays, lab services, insulin treatment, and whirlpool bath the doctor ordered.
Diagnostic tests – full body scan, pregnancy test, blood sugar test kit
Hospital care
Clinic costs
Medicare Part B and Part D
Stop smoking programs
Weight loss program
Medical treatment at center for drug or alcohol addiction
Medical aids – eyeglasses, contact lenses, hearing aids, etc
Ambulance Care
Medical miles – $.19 per mile

Nursing care for a healthy baby
Illegal operations or drugs
Imported drugs not approved by the FDA
Nonprescription medicines (excluding insulin)
Travel the doctor told the client to take for rest or a change
Funeral, burial, or cremation costs

Resource – bmp, CPA includes a breakdown of allowable medical expenses in it’s annual tax organizer for you to make gathering information easier. If you want this breakdown worksheet in advanced, please let us know and we’ll get it to you. or 319.239.9903

IRS Warns about Fake Tax Notice Scam

Washington, D.C. (September 22, 2016)

By Michael Cohn of Accounting Today

The Internal Revenue Service is alerting tax professionals and taxpayers alike about a new scam involving fake CP2000 notices that are being sent to unsuspecting taxpayers, billing them for unpaid taxes related to the Affordable Care Act.

The IRS is issuing the alert in conjunction with its partners in the Security Summit initiative, in which the IRS has been teaming up with state tax authorities, tax software companies, major tax preparer chains and tax professional associations. The IRS has been partnering with the outside groups in an effort to battle the wave of identity theft, tax fraud and tax scams victimizing innocent taxpayers.

The IRS said it has received numerous reports across the U.S. of scammers who are sending fraudulent CP2000 notices for tax year 2015. The scam typically involves an email that includes the fake CP2000 attached to it. The IRS has reported the problem to the Treasury Inspector General for Tax Administration to investigate it.

The CP2000 can be a legitimate notice that the IRS mails to taxpayers through the U.S. Postal Service, but the IRS noted the notice is never sent as part of an email to taxpayers. Taxpayers and tax professionals should be suspicious of any notices that are sent electronically. The IRS does not initiate contact with taxpayers by email or through social media such as Twitter or Facebook.

The IRS’s Automated Underreporter Program generates a CP2000 notice when income reported from third-party sources such as employers does not match the income reported on a tax return. It includes instructions to taxpayers about what to do if they agree or disagree that additional tax is owed. The notice also requests that a check be made out to “United States Treasury” if the taxpayer agrees additional tax is owed. If taxpayers are unable to pay the additional tax, the notice provides instructions for payment options such as installment payments.

The fraudulent CP 2000 notices appear to be issued from an Austin, Texas address and request information regarding 2014 coverage under the Affordable Care Act. The payment voucher lists the letter number as 105C.

The bogus CP2000 notice includes a payment requesting taxpayers mail a check made out to “I.R.S.” to an “Austin Processing Center” at a P.O. box address. There is also a “payment” link within the email.

To determine if a CP2000 notice is real or not, see the IRS web page Understanding Your CP2000 Notice, which includes an image of a real notice. The IRS advised taxpayers or tax pros who receive this scam email should forward it to  and then delete it from their email account. Taxpayers and tax professionals generally can do a keyword search on for any notice they receive. Taxpayers who receive a notice or letter can view explanations and images of common correspondence on at Understanding Your IRS Notice or Letter.


Tax Effects of Divorce or Separation

Issue Number: IRS Summertime Tax Tip 2016-23

If you are divorcing or recently divorced, taxes may be the last thing on your mind but need some serious planning to avoid the ‘shock factor’ at year end when it’s too late to do anything about it. Schedule time with Brooke to discuss.

However, these events can have a big impact on your wallet. Alimony and a name or address change are just a few items you may need to consider. Here are some key tax tips to keep in mind:

  • Child Support.  Child support payments are not deductible and if you received child support, it is not taxable.
  • Alimony Paid.  You can deduct alimony paid to or for a spouse or former spouse under a divorce or separation decree, regardless of whether you itemize deductions. Voluntary payments made outside a divorce or separation decree are not deductible. You must enter your spouse’s Social Security Number or Individual Taxpayer Identification Number on your Form 1040 when you file.
  • Alimony Received.  If you get alimony from your spouse or former spouse, it is taxable in the year you get it. Alimony is not subject to tax withholding so you may need to increase the tax you pay during the year to avoid a penalty. To do this, you can make estimated tax payments or increase the amount of tax withheld from your wages.
  • Spousal IRA.  If you get a final decree of divorce or separate maintenance by the end of your tax year, you can’t deduct contributions you make to your former spouse’s traditional IRA. You may be able to deduct contributions you make to your own traditional IRA.
  • Name Changes.  If you change your name after your divorce, be sure to notify the Social Security Administration. File Form SS-5, Application for a Social Security Card. You can get the form on or call 800-772-1213 to order it. The name on your tax return must match SSA records. A name mismatch can cause problems in the processing of your return and may delay your refund.  Health Care Law Considerations.
  • Special Marketplace Enrollment Period.  If you lose health insurance coverage due to divorce, you are still required to have coverage for every month of the year for yourself and the dependents you can claim on your tax return. You may enroll in health coverage through the Health Insurance Marketplace during a Special Enrollment Period, if you lose coverage due to a divorce.
  • Changes in Circumstances.  If you purchase health insurance coverage through the Health Insurance Marketplace, you may get advance payments of the premium tax credit. If you do, you should report changes in circumstances to your Marketplace throughout the year. These changes include a change in marital status, a name change, a change of address, and a change in your income or family size. Reporting these changes will help make sure that you get the proper type and amount of financial assistance. This will also help you avoid getting too much or too little credit in advance.
  • Shared Policy Allocation. If you divorced or are legally separated during the tax year and are enrolled in the same qualified health plan, you and your former spouse must allocate policy amounts on your separate tax returns to figure your premium tax credit and reconcile any advance payments made on your behalf.

Student Loan Forgiveness

We get so many questions on student loan forgiveness so I thank the Corridor Business Journal for the following guidance.

Other student loan forgiveness tidbits:

  1. No, it cannot be forgiven in bankruptcy
  2. Yes public loans typically are better than private loans
  3. FAFSA is not as daunting as it appears to be
  4. Is student debt consolidation an intelligent option? Depends on the situation – let’s budget.
  5. Can student loans for certain occupations be forgiven? Yes…see the program below for teachers.
  6. The forgiven student loan debt may be taxable income.

Requests for student-loan forgiveness for teachers up 13 percent

Applications for student-loan forgiveness funding earmarked for Iowa teachers increased 13 percent this year, according to Iowa College Aid.

A total of 126 teachers in Iowa received an average of about $5,500 used to repay student loans this year, Iowa College Aid announced on Friday. The funds were awarded as part of the Iowa Teacher Shortage Loan Forgiveness Program. The average repayment was $5,493, for a total amount awarded of $692,171.

The program targets specific subject areas with a shortage of teachers, and received 543 applications for the 2015-16 school year, marking a 13 percent increase from the previous year. This year’s recipients have a total of $5,645,740 in outstanding federal student loans, with an average debt of $44,807. The three most common subject areas where this year’s recipients teach are family and consumer science, industrial technology and foreign languages.

To be eligible for the Iowa Teacher Shortage Loan Forgiveness Program, applicants must be a fully-licensed teacher in a shortage subject area designated by the Iowa Department of Education; have started teaching in Iowa on or after July 1, 2007; owe a balance on an eligible federal student loan; and be in good standing on all federal student loans.

For more information on the Iowa Teacher Shortage Loan Forgiveness Program, visit

Qualities of Success – Do You Have It?

I’ve always said the most successful people in life (whole picture approach) are those that:

  1. Admit they have a weakness
  2. Take action to surround themselves with people who help turn weakness into strength
  3. Take actions on a daily basis to become better
  4. And care about themselves and those close to them.

This definition of success replicates my successful budget clients. Success focused people who know spending is not where it should be, reach out to Brooke for guidance, change behaviors, and really care about the impact it has on themselves and their friends and family.

If this person is you – weakness of no emergency fund, high interest rate debt looming, and no retirement savings and you need help with step #2 contact Brooke for budget guidance.

Words from one successful budget gal nicknamed Penny Dreadful to another:

The first month, no matter what, just DO IT. It will feel hard. It may feel impossible. But do EXACTLY what Brooke says for the first month and I promise your life will be changed for the better.

Identity Theft Can Affect Your Taxes

Issue Number:   IRS Summertime Tax Tip 2016-16 direct reprint from

Tax-related identity theft normally occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Many people first find out about it when they do their taxes.

The IRS is working hard to stop identity theft with a strategy of prevention, detection and victim assistance. Here are nine key points:

  1. Taxes. Security. Together. The IRS, the states and the tax industry need your help. We can’t fight identity theft alone. The Taxes. Security. Together. awareness campaign is an effort to better inform you about the need to protect your personal, tax and financial data online and at home.
  2. Protect your Records. Keep your Social Security card at home and not in your wallet or purse. Only provide your Social Security number if it’s absolutely necessary. Protect your personal information at home and protect your computers with anti-spam and anti-virus software. Routinely change passwords for internet accounts.
  3. Don’t Fall for Scams.  Criminals often try to impersonate your bank, your credit card company, even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts. Also, the IRS will not call you threatening a lawsuit, arrest or to demand an immediate tax payment. Normal correspondence is a letter in the mail. Beware of threatening phone calls from someone claiming to be from the IRS.
  4. Report Tax-Related ID Theft to the IRS. If you cannot e-file your return because a tax return already was filed using your SSN, consider the following steps: • File your taxes by paper and pay any taxes owed. • File an IRS Form 14039 Identity Theft Affidavit. Print the form and mail or fax it according to the instructions. You may include it with your paper return. • File a report with the Federal Trade Commission using the FTC Complaint Assistant; • Contact one of the three credit bureaus so they can place a fraud alert or credit freeze on your account;
  5. IRS Letters. If the IRS identifies a suspicious tax return with your SSN, it may send you a letter asking you to verify your identity by calling a special number or visiting a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.
  6. IP PIN. If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-file your tax return. Each year, you will receive an IRS letter with a new IP PIN.
  7. Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can visit and follow the chart on How to Report Suspected Tax Fraud Activity.
  8. Combating ID Theft.  In 2015, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft returns.
  9. Service Options. Information about tax-related identity theft is available online. We have a special section on devoted to identity theft and a phone number available for victims to obtain assistance.