Why is communication so important when it comes to finances? Because finances are the number one reason for divorce in this country and because the divorce rate is over 50% at this point. Granted, this is not the only reason people get divorced, but I know, even the best of marriages can feel some strain because of money. The reason I chose communication to discuss today is because I am starting to put together a program that will outline steps people can take for their own economic recovery. It starts with coming to terms with your current situation. I think we have all been there at some point in our lives, whether it involved a relationship we realized just was not working for us anymore or our finances have spiraled out of control. Coming to terms with your situation acts as a catalyst towards healing. Please enjoy my blog post from earlier in the week where I share my own personal family story in regards to this (link below).

The next step is to start communicating. If you have a significant other in your life, that is who you need to communicate to first. When you pledged your love for one another, you made the commitment “For richer, for poorer”. You have chosen to walk through this life together…NOT ALONE. So, please do not feel like you need to take this burden on all by yourself.

If you do not have a significant other, find someone very close to you that you feel can be your pillar of strength. No, maybe they are not going through what you are going through, but they can be there to help you get through this. This could be your mom or dad, your children (if they are adult children only please), your dearest friends, a neighbor. You get the idea. This is someone you feel comfortable bearing your soul to. Someone you would trust your life to. Someone you know will not go blabbing your business all over the neighborhood.

If you have no one in your life you feel that comfortable with, seek out a professional. You could find yourself a good CPA (hey, I might know one of those ;0)), a financial advisor, an attorney. Make sure you check out their credentials, their resume and most importantly that you feel comfortable with them.

You have to understand, first that you are not alone. Even when economic times are good, people struggle financially. There is always a way out. It may not be pleasant to go through, but the sooner you do it and the more conscious you are when you go, the better. And, as my mother always says, “This too shall pass.” I promise.

Not only are you not alone, you don’t have to go through it alone. Being a CPA and my husband being in construction, I naturally took over the business and household finances when we moved in together. It got to the point where I was resentful of having that enormous burden on my shoulders. He was frustrated because he did not know what was going on. We now sit down weekly and go through everything. I still do the work because that is what I do for a living and it makes the most sense for us. However, he is fully aware of our financial situation and what is going on. I am hoping to get to the point where if something happens to me, he will be able to take over. I have to admit, we are still working on that one.

Same thing with Lindsay, my employee. It is very important that I keep her in the loop as well. It is a wonderful motivating factor for her. She sees what needs to be done and she takes care of it. You will not always feel comfortable sharing financial information with employees, but there may be a couple key employees where it makes sense. That will have to be a personal decision for you.

The point is, if money is the root of all evil, I feel communication is its kryptonite.

From www.irs.gov, to file your 2009 individual tax return, you’ll have to decide which form to use…unless you e-file. If you file electronically, the software automatically selects the simplest and best form for you. Whether you use e-file or prepare on paper, using the simplest form will help avoid costly errors or processing delays. And remember, if you file electronically, it speeds up the processing of your tax return and the delivery of your refund.

Here are things to consider when deciding which IRS form to file.

Use the 1040EZ if:

• Your taxable income is below $100,000
• Your filing status is Single or Married Filing Jointly
• You and your spouse – if married — are under age 65 and not blind
• You are not claiming any dependents
• Your interest income is$1,500 or less
• You are not claiming the additional standard deduction for real estate taxes, taxes on the purchase of a new motor vehicle, or disaster losses

Use the 1040A if:

• Your taxable income is below $100,000
• You have capital gain distributions
• You claim certain tax credits
• You claim deductions for IRA contributions, student loan interest, educator expenses or higher education tuition and fees

If you cannot use the 1040EZ or the 1040A, you’ll probably need to file using the 1040. You must use the 1040 if:

• Your taxable income is $100,000 or more
• You claim itemized deductions
• You are reporting self-employment income
• You are reporting income from sale of property

All IRS forms, instructions and information about e-file can be found on IRS.gov.

When I was eleven years old, my father had to have surgery for a malignant brain tumor. Considering my age, I did not understand the enormity of the situation. But, I distinctly remember asking my dad years later when I was in high school this question, “How did you go into the operating room that day knowing your brain was going to be exposed to the elements?” I mean, the thought of him having to anticipate that literally makes my stomach turn today. I remember the day as if it was yesterday. My brother and I usually rode our bikes to school, but that day my dad drove us to school. Then, it was off to the hospital for him. To have to go about your daily life with that agonizing thought?!

I will never forget his response. “I went into that operating room assuming I was not going to come out alive. I had come to terms with death and I was at peace with it.” He still had the will to live. He had two young children and a wife to live for, and he fought. He survived and is still living a full life. But, coming to terms with your situation and reality can bring an enormous sense of peace.

I remember the day some time ago that I had to come to terms with my personal financial situation. Granted, my situation was no where near as grave as my father’s health crisis, but I did learn a lesson from it. That moment that I realized that things could not keep going the way they were going. We were definitely on a crash course with reality if things did not change…and quickly. That was scary.

But, then, I came to terms with my situation. I made peace with it. Fear was holding me back and trying to get me to keep doing what I was used to doing. However, that was clearly not serving me well anymore. Once I came to terms, I felt so empowered! There was this enormous sense of relief around me. I no longer had to keep trying to make it all work knowing it did not. I could be real now. I didn’t need to keep up with anyone or put on a show.

Peace was all around me. No matter what happened, I was at peace with it. I knew we could get out of it. But, things were going to change…and that was okay.

Coming to terms with your situation can be freeing and enlightening. Are you putting on a facade? Are you trying to make something work that just clearly isn’t going to? Do you keep burying your head in the sand? It’s okay, the first step is coming to terms.

From www.irs.gov, when you prepare to file your tax return, there are two things that will factor into your tax situation: dependents and exemptions. Here are five important facts the IRS wants you to know about dependents and exemptions before you file your 2009 tax return.

1. If someone else claims you as a dependent, you may still be required to file your own tax return. Whether or not you must file a return depends on several factors, including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and, any advance Earned Income Tax Credit payments you received.
2. Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2009 tax return. Exemption amounts are reduced for taxpayers whose adjusted gross income is above certain levels, depending on your filing status.
3. If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own tax return.
4. Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.
5. Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.

For more information on exemptions, dependents and whether or not you or your dependent needs to file a tax return, see IRS Publication 501. The publication is available on IRS.gov or can be ordered by calling 800-TAX-FORM (800-829-3676).

From www.irs.gov, everyone who files a federal tax return must determine which filing status applies to them. It’s important you choose your correct filing status as it determines your standard deduction, the amount of tax you owe and ultimately, any refund owed to you.

Here are eight facts about the five filing status options the IRS wants you to know in order to choose the correct filing status for your situation.

1. Your marital status on the last day of the year determines your marital status for the entire year.
2. If more than one filing status applies to you, choose the one that gives you the lowest tax obligation.
3. Single filing status generally applies to anyone who is unmarried, divorced or legally separated according to state law.
4. A married couple may file a joint return together. The couple’s filing status would be Married Filing Jointly.
5. If your spouse died during the year and you did not remarry during 2009, you may still file a joint return with that spouse for the year of death, provided the joint return election is not revoked by a personal representative for the deceased spouse.
6. A married couple may elect to file their returns separately. Each person’s filing status would generally be Married Filing Separately.
7. Head of Household generally applies to taxpayers who are unmarried. You must also have paid more than half the cost of maintaining a home for you and a qualifying person to qualify for this filing status.
8. You may be able to choose Qualifying Widow(er) with Dependent Child as your filing status if your spouse died during 2007 or 2008, you have a dependent child and you meet certain other conditions.

There’s much more information about determining your filing status in Publication 501, Exemptions, Standard Deduction, and Filing Information. Publication 501 is available on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

I woke up about 4:00 this morning to the sound of rain on my window. I was having a difficult time falling back to sleep, but I didn’t mind, I love listening to the rain. Living in California, we don’t get nearly as much as the rest of you throughout the country, so I love it when it is here. Plus, is there anything better than snuggling up in a warm bed listening to the rain? Okay, maybe there is, but it is certainly one of my favorite things to do. But, I digress, the reason I am so focused on the rain is because as I was laying there I thought about how cleansing the rain is. Doesn’t everything just seem cleaner (cars excluded) after the rain? Very purifying. That is when I decided to come clean about how I successfully maneuvered my family through a one third decrease in our income over the last two years. It has been a very painful, eye opening and cleansing process, but I am very proud now.

Yesterday I ran through my families estimated taxes, just wanted to make sure we didn’t owe the IRS anything before the 15th of January. When I pulled the numbers together, I had to show my husband because I almost fell out of my chair when I saw them. Our income was the lowest since before I started my practice in 2003. No wonder last year was so painful, we have two more children since then! I’ll explain more about why I was so proud later.

Some of you may know that my husband is an electrical contractor and he has his own business which he runs on the side. I have my own practice as a CPA. For the last five and half years we have been on the self employed financial roller coaster. With the economy the way it was last year, my husbands side business became almost non-existent. My practice definitely took a hit as well as the fact I hired a part-time employee. So, how did it all fall nicely into place?

• The Purge – It all started in the summer of 2008. The poop was hitting the fan financially. That is when I started to realize we had completely over extended ourselves. That is when I accepted the fact that my very own actions had gotten us in some hot water. It was ugly. It was painful. But, once it was out, there was nothing left to fear. All my dirty laundry was out there for everyone to see and I was okay with that because now, maybe I can help others.
• The Plan – Once all of the ugly stuff was out there, my husband and I made a plan. I bit the bullet and sold my one year old full size SUV for $7,000 less than I owed on it. Not to mention the $30,000 in depreciation it took in just over one year. Tell me that didn’t hurt! But, the fact of the matter was, I could not afford the $726 per month payments, so I had to make it work. We went through our financials and cut back wherever we saw necessary.
• The Forgiveness - I cannot tell you how many times I have woken up in the middle of the night and lay there beating myself up about the decisions I had made in the past. But, there came a point where I realized that was not serving any purpose. As my husband always says, “It is what it is.” I can’t change the past, I can only change how I choose to move forward in the future and beating myself up is just not smart. So, I moved on and started to look ahead instead of in the rear view mirror.
• The Execution – No, I swear no one was executed in this process! This is the execution of the plan. My husband and I started to keep meticulous tabs on our financials. Being a CPA, I have always kept close tabs, but I am talking about having a weekly budget and following it. Saying no to things if we could not afford it. Absolutely refusing to break out the credit cards for anything. And, slowly paying down the debt we had accumulated. We got rid of our pest control, our pool guy and our housekeeper. We started shopping only at Walmart and Costco. We cut our monthly budget by almost $5,000. Was it easy? No. But, we did it and it was not nearly as bad as you would think it was.
• The Proud Moment – Yesterday when I finished the numbers and saw how much our income had gone down, I felt a little deflated. But, then again, I think almost everyone is feeling that way right now. However, when I realized what we had accomplished, I was almost giddy. With our income as low as it was, this is the most in control I have felt with our finances since becoming self employed. I have plenty of savings, our debt is being paid down and we are not using any credit.

Should I have been more careful to begin with…yes. But, I have learned some valuable lessons and I don’t mind airing my dirty laundry if it means you learning something. I hope this gives you the momentum you need to finally take your financial life by the horns.

I believe it was September when I actually realized my mojo was missing. I was having dinner with some girlfriends and we started discussing it. I started thinking about myself back in high school and college. I just presented myself different. According to my husband, I walked with a strut (he later explained it to be that I walked with a purpose). In other words, I am going somewhere, move out of my way. I was never malicious or mean to anyone, that is just not my style. But, I knew what I was doing, where I was going and no one had better get in my way or I would let them know about it. It definitely got me in some hot water when I was younger, because insecure people would try to bring me down. But, I never wavered. My method of operation was to feel the sting, cry (just a little bit) and then get really ticked off. That was when I would turn into a bulldozer. It was like, “Oh, you don’t think I can do this? Well, let me show you how wrong you are!” I did it in college with difficult professors, I did it at the beginning of my career with difficult Seniors and Managers. I LOVED proving them wrong.

Then, I had my first son and I was thrown into a tailspin. Anyone that has ever had children knows the tailspin I am talking about. Suddenly, I don’t have complete control anymore, I can’t just “prove him wrong” to make myself feel better. Things weren’t nearly as cut and dry. Also, finances became much more complicated. Budgeting was more difficult, there was a lot more to think about. And, to top it all off, I had this little man completely depending on me. Wow, that will rock your world. Now, I don’t want to completely bore you with all the things that have beaten me down over the last eight years, but I am sure you understand. Life has taken my mojo away. It is still there, somewhere, it is just hiding from me.

I can see now, the consequences have been significant. I feel like I have become this totally wimpy victim. With that, comes blaming others for my situation. Whether it is dealing with the down economy or dealing with difficult clients. I haven’t had the same fire lit up under me. Well, that has all changed. Whenever I feel my shoulders slump, I immediately put them back. Every time I start to see that wimpy Kristi come back, I immediately think of that feisty girl I used to be. I am slowly, but surely, bringing her back. There is no longer a victim here. I own it! I know who I am and what I am here to do. Okay Universe, watch out, Kristi’s got her mojo back!

From www.irs.gov, if you were married or divorced recently, there are a couple of things you’ll want to do to ensure the name on your tax return matches the name registered with the Social Security Administration.

Here are five facts from the IRS for recently married or divorced taxpayers. Following these steps will help avoid problems when you file your tax return.

1. If you took your spouse’s last name or if both spouses hyphenate their last names, you may run into complications if you don’t notify the SSA. When newlyweds file a tax return using their new last names, IRS computers can’t match the new name with their Social Security Number.
2. If you were recently divorced and changed back to your previous last name, you’ll also need to notify the SSA of this name change.
3. Informing the SSA of a name change is a snap; you’ll just need to file a Form SS-5, Application for a Social Security Card at your local SSA office.
4. Form SS-5 is available on SSA’s Web site at www.socialsecurity.gov, by calling 800-772-1213 or at local offices. It usually takes about two weeks to have the change verified.
5. If you adopted your spouse’s children after getting married, you’ll want to make sure the children have an SSN. Taxpayers must provide an SSN for each dependent claimed on a tax return. For adopted children without SSNs, the parents can apply for an Adoption Taxpayer Identification Number – or ATIN – by filing Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions with the IRS. The ATIN is a temporary number used in place of an SSN on the tax return. The W-7A is available on IRS.gov, or by calling 800-TAX-FORM (800-829-3676).

From www.irs.gov, while the tax filing deadline is more than three months away, it always seems to be here before you know it. Here are the Internal Revenue Service’s top 10 tips that will help your tax filing process run smoother than ever this year.

1. Start gathering your records Round up any documents or forms you’ll need when filing your taxes: receipts, canceled checks and other documents that support an item of income or a deduction you’re taking on your return.
2. Be on the lookout W-2s and 1099s will be coming soon from your employer; you’ll need these to file your tax return.
3. Try e-file When you file electronically, the software will handle the math calculations for you. If you use direct deposit, you will get your refund in about half the time it takes when you file a paper return. E-file is now the way the majority of returns are filed. In fact, last year, 2 out of 3 taxpayers used e-file.
4. Check out Free File If your income is $57,000 or less you may be eligible for free tax preparation software and free electronic filing. The IRS partners with 20 tax software companies to create this free service. Free File is for the cost conscious taxpayer who wants reliable question-and-answer software to help them prepare a return. Visit IRS.gov to learn more.
5. Consider other filing options There are many different options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free face-to-face help at an IRS office or volunteer site. Give yourself time to weigh all the different options and find the one that best suits your needs.
6. Consider Direct Deposit If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a paper check.
7. Visit IRS.gov again and again The official IRS Web site is a great place to find everything you’ll need to file your tax return: forms, tips, answers to frequently asked questions and updates on tax law changes.
8. Remember this number: 17 Check out Publication 17, Your Federal Income Tax on IRS.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return.
9. Review! Review! Review! Don’t rush. We all make mistakes when we rush. Mistakes will slow down the processing of your return. Be sure to double-check all the Social Security Numbers and math calculations on your return as these are the most common errors made by taxpayers.
10. Don’t panic! If you run into a problem, remember the IRS is here to help. Try IRS.gov or call our customer service number at 800-829-1040.

Dictionary.com defines focus as “a central point, as of attraction, attention, or activity.” I love this word because it is my new best friend. I have always been one that was focused. For goodness sake, I made the decision to do accounting when I was fifteen. From what I understand, not many teenagers do that, and stick with it. The fact of the matter is, I love numbers. I have always loved numbers…they speak to me. And, honestly, they speak to me now more than ever.

When you are in school, your life is mapped out for you. When you finish first grade, you go to second and so on. After you graduate from high school, there are some variations, but overall, your life is still pretty mapped out for you if you go the college route. Once you make your decision about your major, they give you a list of classes and prerequisites and guide you through the maze.

In my field of accounting, again, there are variations, but overall your life is still mapped out for you depending on your goals. Mine was to get licensed as a Certified Public Accountant, so I followed that route.

But, then I had children. My focus was taken so far off course, it has taken me almost eight years to get back in focus. The good news is, I figured out this morning that this  mama is focused again! I know what I want and I don’t plan on letting anything get in my way.

Focus is such an amazing gift. While you may have life’s challenges take you off course, focus is what helps you get back on track. For years I really was not sure what I wanted. I had these three absolutely perfect little boys. I was so worried I was not spending enough time with them or being a good enough mom. I wanted clients, but I wanted to spend time with my boys. I wanted more money, but I didn’t want to work too much.

Now, I understand that the best gift I can give my boys is a happy and successful mom. With that decision made, I have been able to focus on my business more than ever while still being the best mom I can be. I have the Black Eyed Peas song “Let’s Get it Started” running through my head because even though I have had my business for over five years, I almost feel like I am just now really lifting off.

I am so excited because I feel like I have just given birth to my fourth baby. I cannot wait to see what this year has in store for me now with my new found focus.