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A Wealth of Information… Your 1040!

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by Al Benelli, CFP, FIC

A Wealth of Information… Your 1040!

OK, so the deadline for filing personal income tax forms with the IRS is just a bit over due.  And yes, I know that you may file for an extension if you need more time to get your data together... but for now I’d like to talk to those who have already filed their 2011 federal taxes or are getting ready to do so this month.

You may not realize it, but you are likely holding the most contemporary and comprehensive summary of your personal or family financial profile that you have ever created.

In the 20+ years I've spent in the financial services industry, one of the most common excuses I've heard from people who found it difficult to get started on the process of financial planning was... I just don’t have the time!

Well, considering that one of the most time consuming aspects of financial planning is the initial task of "data gathering", you've already accomplished a huge chunk of it.


Yes, we all realize that your 1040 is a reflection of your finances up to and including December of last year, but few people keep a complete financial profile that is accurate and current through the latest fiscal quarter... much less right up to the actual date! 
If we accept that, we must also recognize that the data in our 1040 is aging by the day... and unlike wine... data does not improve with age.

Within our 1040 is a summary of our earnings, both active from wages and salaries as well as passive from taxable interest earned and capital gains.  The “adjustments” made to our gross income can also tell us much about our financial picture as well as our personal approach to qualified retirement plan contributions and the like.


Dependent information can be gleaned from our personal exemptions and filing status as well as a glimpse into those expenses we may have chosen to itemize, such as our mortgage interest costs, medical expenses, taxes and charitable contributions.  See what I’m getting at here?

If you have ever considered getting a financial analysis done by a qualified professional or perhaps even wished to begin to work up a long-term financial plan for you and your family... I’m making the case that now is an excellent time to do so.  Your taxes are filed (or will be shortly) and your supporting data and documentation should be right at hand.


Even if all the details are not evident within the lines of your tax form, a trained and qualified planner will be able to formulate questions from that at hand in order to properly illuminate your total picture.




Tags: boomers money 1040 taxes financial advisor

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