Money - What is Your Relation to It?

Have you ever thought about what it would be like to live in a society that did not use money as a means for livelihood?  There are countries in the world where reciprocal arrangements are made to care for the needs of those within a community.  Knowledge of how money works is not a concept that they are familiar with.

In Lynn Twists book, The Soul of Money, she describes a situation where a member of such community moved into our realm and had to learn from scratch how to survive.  In her words,  He began to see how it is in America:  that virtually everything in our lives and every choice we make-the food we eat, the clothes we wear, the houses we live in, the schools we attend, the work we do, the futures we dream, whether we marry or not, or have children or not, even matters of love-everything is influenced by this thing called money.

As foreign as a concept of money is to such a community, it is also a topic that many of us do not question or think twice about . . . money is just money and remains a way of life.  Gaining better insight to the purpose of money and the value we place on it is something we should endeavor to understand.  Lynn says:  We all have an identifiable through largely unconscious and unexamined, relationship with money that shapes our experience of life and our deepest feelings about ourselves and others.  She goes on to say Money has become a playing field where we measure our competence and worth as people. 

Lynn’s books provides great insights on how our society has come to not question the relevance of money and how it drives our lives, our decision, and our self-esteem.  If you would like to question your own ideas of money, I think you will find this book very insightful.  We challenge assumptions about every other facet of life:  race, religion, politics, education, sex, family, and society.  But when it comes to money, we accept it not only as a measure of economic value, but also as a way of assigning importance and worth to everyone and everything else in the world.  

Often times we use the term success to mean wealth, maybe success is a concept that we should also evaluate?   

How is Your Relationship with Money?

Today I was having lunch with a friend who is a Financial Planner. She has great passion for her work, and even a greater compassion for the people she counsels. We were talking about people's relationship to money. With so many people out of work often the family focus is on how to improve their financial condition (credit scores, bank balances, etc.) Money can influences a lot of our thinking. She and I share the same core beliefs about money, so I felt like she would really enjoy reading a book that I've loved since the first time I read it.

Author, Lynne Twist, wrote the book, "The Soul of Money" in 2003. Since that time Lynne has added a few new titles to her accomplishments. While doing a little research about what Lynne has been up to, I came acrossed this interview. This book is a great source of inspiration and helps to put some perspective on whether money is something that one should be chasing, or whether it's influence is stronger if we merely direct it's use.



If you read, or have read this book, I would enjoy your comments

Year End Planning - Record Retention

It’s hard to believe another year is coming to an end. For many, the end of the year is thought of as a time to spend with friends and family during the holidays. However, even though people don’t like to think about it, the end of the year is also an important time to begin preparing for the upcoming tax season.


While gathering the paperwork needed to file the current year’s tax return and beginning to start a new file for the upcoming year, it is sometimes hard to know what information should be kept and for how long. Retaining and storing your income tax records is an important final step of your tax filing responsibility. This article will provide you with some of the rules for keeping your tax records, along with some information on storage options.


First of all, almost everyone knows that tax returns should be kept indefinitely. However, it is not necessary to keep documents supporting an item of income or deduction on a tax return that long. Generally, there are two things that should be considered when determining how long a supporting document should be kept;

1. the time frame over which the IRS can audit the return and assess a tax deficiency, and
2. the time frame you have to file an amended return. For most taxpayers, this period is three years from the original due date of the return or the date the return is filed, if later.

For example, if you filed your 2008 Form 1040 on or before April 15, 2009, the IRS has until April 15, 2012, to audit the return and assess a deficiency. However, if a return includes a substantial understatement of income, which is defined as omitting income exceeding 25% of the gross amount reported on the return, the statute of limitations period is extended to six years.

A good rule of thumb for keeping tax records is to add a year to the IRS statute of limitations period. If you use this approach, you should keep your income tax records for a minimum of four years. However, it may be more prudent to retain your records for seven years, which the IRS informally recommends. State tax rules must also be considered, but holding records long enough for IRS purposes will normally be adequate for federal and state tax purposes, assuming the returns were filed at the same time.


There are certain tax records that should be kept much longer than described above and some, indefinitely. For instance, records relating to the cost basis of property that could eventually be sold, such as investment property and business fixed assets, should be retained based on the record retention period for the year in which the property is disposed. Also, along with tax returns, there are other records that should be kept indefinitely. These records include IRS and state audit reports, business ledgers, financial statements, and corporate records. Attached is a schedule listing some recommended document retention time periods that may be a good reference to keep handy in case you ever have some questions on a certain document.


Even though a document may no longer be needed for tax purposes, keep in mind that there may be non-tax reasons to keep certain tax records. Examples might include documents such as insurance policies, leases, real estate closing statements, employment records, and other legal documents. It’s always a good idea to make sure documents will not be needed for any other purpose before disposing of them.


It’s also important to know that the IRS permits taxpayers to store certain tax documents electronically. Although the rules are aimed primarily at businesses and sole proprietors, they presumably apply to other individuals as well. The rules permit taxpayers to convert paper documents to electronic images and maintain only the electronic files. The paper documents can then be destroyed. However, certain requirements must be met to take advantage of an electronic storage system.


Hopefully this brief overview helps you understand the income tax record retention rules a little better. However, it may be a good idea to seek guidance from an accountant or attorney if you are ever unsure about whether or not a certain document can be discarded.

Recommended Document Retention Time Periods

This article was submitted by Rhonda Herzhaft, CPA with Conn, Geneva, and Robinson CPA Firm.  Rhonda has ten plus years of tax accounting related experience.