RetireWell Blog

Financial Planners | Annuities, IRA, Retirement & Investment | Bowman Financial Strategies

Preparing for Tax Season #7

Sunday, November 25, 2018
11:47 AM

Hi everyone, welcome to Uncommon Cents, Episode #1. Uncommon Cents is The Financial Education series by Bowman Financial Strategies. Today’s Podcast is the inaugural episode of Uncommon Cents and I wanted to provide a brief overview of what you can expect and how this podcast differs from its sister podcast, Mastering Mondays. Many of you may be familiar with Mastering Mondays, a non-financial podcast discussing topics to help you live better in retirement covering topics like health, psychology, food, travel, relationships and hobbies. Uncommon Cents by contrast is focused solely on financial topics with a focus on areas relevant to those that are near or at the transition from Accumulation to Distribution.  

This communication does not constitute federal tax advice and it may not be used as such. Please consult a qualified tax professional for tax advice or assistance.

Today we are talking about tax forms. Just saying it makes every accountant get excited. Ooooh, tell me more about my 1099r, please! Today I am going to review the most common forms that you will run across and some other basic tax preparation tips. Many of these forms are related to accounts I manage for my clients, so if you are a client and you ever have questions about any tax form or need a copy from a current or prior year, please reach out to my office and I am glad to help.
As you prepare for the 2018 tax filing season, you may find these checklists helpful. They outline the forms you should be collecting in the coming months, so you can successfully file your taxes. The IRS has a checklist here, The financial Website Investopedia has a great article and checklist to help you get prepared here:
Summary of Action Steps to Prepare for Tax Season:
Step 1: Schedule a time with your preparer so you can have your appointment prior to April 17th to ensure you can institute any tax savings actions prior to deadlines imposed by the IRS. If you use an accountant, be early! They get very busy during accounting season, and the first folks in the door will get taken care of first. If you don’t use an accountant, I recommend finding one unless your taxes are extremely simple.
Step 2: Gather information. The forms listed below fall under the umbrella of a group of IRS Tax Forms call Informational Forms. Here is the quick list of the most common forms. There are more! So, do not use this as an exhaustive list. However, these are the forms I most
Step 3: Gather receipts and charitable contribution information. In addition if you are making Charitable contributions, here is a link to the IRS pamphlet that details the type of substantiation you may need to include your contribution as a deduction.
Step 4: Gather all personal information like Social Security numbers for you and any dependents, EINs (companies you own) or Trust Identification Numbers (TIN) for any Trusts you may have.
Step 5: Gather last years tax returns. If you are using a new accountant they will need to see last years tax forms form the state as well as the federal government.
Step 6: Go to your appointment
Here is a quick list of forms I commonly see my clients receiving. You can click on a name of a form in the quick list and it will take you to Investopedia website where you will find the specific description of each form. I wrote a brief description of each form below as well as a slightly longer descriptions and some unique circumstances that may apply to you.
Common Informational IRS Forms:
W2 (Income earned, and taxes paid. For an Employee)
1098 Mortgage Interest Statement
1098-C, E, T (Donations, student loan interest, and Tuition payments)
1099-Misc (Non-employee compensation)
1099-B (reports Gains or Losses on securities investments)
1099-R (IRA distributions)
1099 INT (Interest received)
1099-DIV (Dividend received)
1099-LTC (LTC benefits received)
5498 (IRA contributions)

W2: First, many of you may still be working. If you are an employee of a company, you will receive your annual W-2 from each company you work for. This form is provided by your employer and per the IRS, “It reports the wages earned by employees and the taxes that were withheld from their paychecks. It also reports Social Security tax, a.k.a. the Federal Insurance Contributions Act (FICA) tax, to the Social Security Administration. The FICA tax has two components, the Social Security portion and the Medicare portion, which are separately reported on Tax Form W-2.” You should receive these forms per current federal law by January 31. You may have multiple W2 forms if you worked for more than one company in the calendar year you should receive one from each employer.

1099 MISC: For those who are not W2 employees but earn their income as Independent Contractors, you will receive a 1099-Misc. Per the IRS, “Tax Form 1099-MISC is commonly used among self-employed professionals to report profits from services performed for other organizations. If you are a sole-proprietor and were paid more than $600 for services during a given tax year, the business you worked for is required to send Tax Form 1099-MISC.
1099-R: A common form that our clients will see each year. The 1099-R form is issued by the IRS and reports distributions from IRAs, annuities, profit-sharing plans, insurance contracts, or pensions. The form must be mailed to the recipients by the custodian at the latest by Jan. 31 of the year after the distribution was made

Read more: Form 1099-R. For my clients, you may see this form in 3 common scenarios although all scenarios may not apply to you.

W2 (Income earned, and taxes paid.  For an Employee)

1098 Mortgage Interest Statement

1098-C, E, T (Donations, student loan interest, and Tuition payments)

1099-Misc (Non-employee compensation)

1099-B (reports Gains or Losses on securities investments)

1099-R (IRA distributions)

1099 INT (Interest received)

1099-DIV (Dividend received)

1099-LTC (LTC benefits received)

5498 (IRA contributions)

These are just the highlights; however, they probably represent 80% or more of the tax forms you should receive. Your situation is unique and what applies to someone else may not apply to you, so be sure to get with an accounting professional to ensure you are not paying more in taxes than you need to. With all the tax changes in the last year, I believe it is wise to consider using an accountant. Speak with your accountant to determine how these tax forms will be used to calculate your taxes each year. And, you don’t want to get sideways the IRS.
I hope this note helps you prepare, and maybe gets you started earlier than you would have otherwise.

Thank you for listening to the Bowman Financial Strategies Uncommon Cents Podcast and Blog. I appreciate your time. Please feel free to send me questions by going to our website at and go to the Contact Us page or send me an email at [email protected] Finally you can always reach us at 303-222-8034.
Now go ahead and use this Uncommon Cents information to LiveWell in retirement!

Mastering Monday’s Blog Episode #1

Hi All!

I really hope you enjoyed your weekend and I am excited to write this email.  I have been thinking very hard lately about ways that I can more fully serve the needs of the people I am grateful to call my clients and friends. The primary reason we create financial plans at  Bowman Financial Strategies is so you can live the life you want to live without worrying about finances.  I like to think of it as creating a predictable Income Plan and an Exciting Retirement.  To this end, I will send an email on the first Monday of the month called, Mastering Monday.  I will discuss various topics and obsessions of mine that revolve around “living well”.

There are many personal and communal aspects to living well.  Thoughts that come to mind are:

  1. Being as healthy as you can be,
  2. Enjoying hobbies,
  3. Growing by giving,
  4. Spiritual satisfaction,
  5. Nurturing relationships,
  6. Continuous education,
  7. Progressing towards your goals.

This list is just a start, and I want to hear your thoughts on living well.

Below are areas of focus for me this month.  I’d love to know if any of these ideas inspire you and how.  Enjoy!

Reading is Fundamental

The earliest self-help Guru of all time may be Benjamin Franklin.  I am listening to his Autobiography.  The perspective is from Benjamin Franklin to his son as he imparts his personal history and passions in writing.  His writing skills and focus on continuous improvement are extraordinarily motivating.

What’s in  Your Mind

Many of the most successful people in the world share certain behaviors.  One of them is silent time, meditation or praying.   If  Tony Robbins, the  Dalai Lama, Steve Jobs, and Oprah can find time to do it, it may be worth investigating.  Sit or lie down, eyes closed, breath smoothly, dwelling on what you are grateful for.  Visualize a successful day and commit to making someone happy. Do this for just 5-10 minutes before you start your day and it can change your life.  If it is hard to find that 5 minutes you really need to do this.  Important!  Do this before you look at your phone or email. Preferably right out of bed or in bed.  Controlling the first 10 minutes of your day sets a good rhythm for the rest of the day.  Consider this free app from  Kevin Rose called, “Oak Meditation” at  The app is simple to use and provides guided breathing exercises and sleep programs.  What I like most is the choice of background sounds like a soft rain, or crackling fire in the background during meditation or to lull you to sleep.   My wife and I use a Bluetooth speaker on the bedside table instead of the phone speaker.  When my wife and I listen, it really seems to help us fall asleep more quickly and peacefully.

Food for Thought

With my focus on trying to manage what goes into my gut, I am sticking primarily to red wine if I consume any alcohol.  A wine I really like is Hot to Trot Red Blend.  It is made by  14 Hands Winery and found at most liquor stores for around $7.99.   I’ve been drinking the Red Blend since my Mother-in-Law recommended it 6 years ago (Thank you Mom!).  The price rarely changes, and it is smooth and drinkable.  The Chardonnay is good too.

Take Action

The only thing that can create proactive change towards a goal in your life, is to take conscious, intentional action.

“Don’t let your learning lead to knowledge. Let your learning lead to action.” ― Jim Rohn

“Don’t ask. Act! Action will delineate and define you.” Thomas Jefferson

Master your Monday and have a great week.


Financial Planners | Annuities, IRA, Retirement & Investment | Bowman Financial Strategies

Food Truck Frenzy!

Owner of Bowman Financial Strategies, Erik Bowman, and his wife Heidi attending the third annual Food Truck Frenzy. This community event took place on June 2 in beautiful Castle Pines, Colorado.

Highlights included 12 food trucks, beer, wine, margaritas, live music, activities for the kids and a pet corner. Thanks for stopping by!

Financial Planners | Annuities, IRA, Retirement & Investment | Bowman Financial Strategies

Bowman Financial Strategies is Expanding…..

Bowman Financial Strategies is expanding and seeking a few select financial advisors.  Have you had success as an advisor, but seek an organization that can provide the environment to reach the next level?  Perhaps we should talk. Send me a note if you think you have what it takes.

Financial Planners | Annuities, IRA, Retirement & Investment | Bowman Financial Strategies

What is an Annuity

When someone asks me if I think annuities are good, my answer is, “it depends”. Annuities are neither bad nor good. It’s either are a good fit for the client’s needs or it’s not. An annuity at its core, is a contract between a client and an insurance company. In the case of some annuities those contracts are simple. A SPIA, or Single Premium Immediate Annuity is a guaranteed number payments of a specified amount in exchange for a lump sum initial payment. For example, if you purchased a SPIA for $100,000 dollars and assume the insurance company will pay you a 6% Single Life payout. You would receive $6000 per year for life.

Other annuities like variable deferred annuities (VDA) can have very complex rules and formulas to determine potential future income streams and death benefits. VDAs can have a few layers of fees, to include; the M&E fee or Mortality and Expense fee, any income rider fees or enhanced death benefit fees. As these are variable investments with potential for loss of principal due to down markets, they often offer a selection of stock and bond investment options to choose from. These internal investments themselves can have a separate cost called an expense ratio. You must understand how these fees both add value but also how they drag on the performance of the underlying cash. There must be a cost benefit analysis done to determine if the benefit of the annuity is worth the total of all fees.

Surrender charges are fees or penalties the carrier charges if you decide to liquidate (cash out) your annuity account before the surrender period is over. The surrender period typically ranges from 3 to 15 years specific to each contract. Many times, the surrender charge decreases with each passing year until eventually reaching 0% penalty thus freeing up your cash. For example, a 7-year surrender period with a surrender charge of 7% in year one, 6% in year two and so on, would have a 0% surrender charge after the 7th contract year. In addition to surrender charges, many annuities have other potential internal charges, rider fees and may have complex distribution rules. Before purchasing an annuity, it is critical that you must understand the pros and cons before making any decisions to purchase an annuity.

Visit our Annuity Planning page to learn more about annuities and download “the 8 things you must know before purchasing an annuity”.

Upcoming posts will cover Fixed Indexed Annuities and Variable Deferred Annuities in more detail.

If you have a topic you would like discussed, here please reach out and let me know.

Have a great day!

Erik Bowman

Wealth Advisor

Financial Planners | Annuities, IRA, Retirement & Investment | Bowman Financial Strategies

Real Life – Caring for Those in Need

I write this brief note as I think about my family, friends and our many wonderful clients at Bowman Financial Strategies. However, as time passes, inevitably some experience significant, unexpected health issues or even the death of a family member that can impact household finances, create emotional anxiety, take a lasting physical toll and can leave them feeling out of control. Many of our strategies reduce the risk that these issues will cause irreparable financial harm but it doesn’t make those challenges any less poignant. Many of us have experienced this in our own families or seen friends deal with tremendously difficult circumstances. At Bowman Financial Strategies, our clients are like family. When they hurt, we hurt. When they are in need, we want to help.

I simply ask that if you know of anyone going through difficult times, let them know you are available to help or just to listen. Your relationship and simply letting them know you care can be one of the most important things in their life at that moment.

This article provides some insight and ideas on what to say and do when you may be struggling with the best way to help. This article specifically relates to someone diagnosed with cancer, but the ideas translate to a broad range of health challenges. The next time you have the opportunity to “be there” for someone, rise to the occasion and be the positive difference in that moment.

I sign off knowing people close to us are facing tremendous challenges and understanding we can’t change past circumstances, but we can have an impact today.


Erik Bowman

Owner, Bowman Financial Strategies

Financial Planners | Annuities, IRA, Retirement & Investment | Bowman Financial Strategies

How Much Money Could You Forfeit to Social Security with the Wrong Filing Strategy?

Social Security Maximization is the process of analyzing all potential filing strategies available to a household and determining which strategy offers highest potential income. You have worked over 80,000 hours and contributed to SS for your whole life. You deserve to receive the highest income possible. Unfortunately, the SSA cannot, and will not help you determine what filing strategy is in your best interest. The SSA can only tell you how much your benefit would at any filing age. They are neither licensed nor allowed to discuss filing strategies with the public. With a lifetime value of potentially over $1,000,000 for a household, we recommend you put the appropriate amount of effort into making this extremely important choice. When to take Social Security? Everyone has 96 basic Social Security filing choices. For an average couple that is 96 x96 which is 9216 choices. However, if you include all the potential spousal benefit choices available to married and sometimes divorced participants, the number of choices is over 100,000. When you compare all potential combinations of filing strategies, you can sort them from highest to lowest in terms of household lifetime income. The difference between the lowest and highest income streams can exceed $150,000 over a standard household retirement lifetime. In other words, by making the wrong filing choice, you could receive $150,000 less in lifetime income than if you made a more strategic decision.

Because the value of this decision is so high, often worth over $1,000,000 in lifetime income, we believe all Retirement Income Plans should contain a thorough analysis to maximize Social Security income.

Erik Bowman

Wealth Advisor

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