What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values. How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity and have been trained to offer biblical financial advice.
To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA. The holidays are behind us, and you know what that means. It's tax season. But do you know who your tax preparer will be? I am Rob West. You may want to lock yours in early because there could be a shortage of qualified tax preparers this year.
I'll talk about the danger that might pose and how to avoid it. Then it's on to your calls at 800-525-7000. That's 800-525-7000. This is faith and finance, biblical wisdom for your financial decisions. So first of all, when you hire someone to do your taxes, the odds are that person will either be a CPA, a certified public accountant, or an enrolled agent. Both are qualified to prepare and file taxes for other people, although the CPA requirements are much stricter than those of an enrolled agent. Some attorneys also specialize in tax law. The problem is right now, there's a shortage of CPAs and enrolled agents. In particular, not enough young people are choosing to become CPAs.
One major firm is even hiring high school interns at $22 an hour to entice them into becoming CPAs. This may be an inconvenience to a lot of people this tax season, but why would it be dangerous? Well, if folks become desperate to find tax professionals to file their returns, it opens the door to unscrupulous tax preparers who may even be falsifying their credentials. The IRS suggests a number of ways to protect yourself from these fraudsters who come out of the woodwork every tax season to perpetrate refund fraud, identity theft, and other scams.
Look for a preparer who's available year-round. If you're audited, you certainly want your tax preparer available to represent you, so obviously you want to avoid fly-by-night operations. When interviewing a tax preparer, ask for their IRS preparer tax identification number, or PTIN. Paid tax return preparers are required to register with the IRS, obtain a PTIN, and enter it on any returns they prepare.
You can check whether a tax preparer has done this by going to IRS.gov and looking them up in the directory of federal tax return preparers. This tool can help you locate a preparer in your area with the qualifications you're seeking. You should also ask if the preparer has a professional credential, such as a CPA or enrolled agent.
Ask about continuing education classes they've taken. Tax laws are complex and change frequently. Preparers have to stay up to date on tax topics. You can also check on the history of a tax preparer. For CPAs, check with the state board of accountancy.
For enrolled agents, go to IRS.gov and search for verify enrolled agent status. For attorneys, check with their state bar association. Then you also want to ask about fees. Avoid preparers who base their fees on a percentage of their client's refund, or if they brag, their refunds are bigger than the competition. Do not give any personal information or documents to a preparer unless you've checked them out and are satisfied that they're legitimate.
All a fraudster needs is your social security number to file a fraudulent return and steal your refund. You also may want to make sure the preparer offers IRS e-file and then ask to have your return filed that way. If the preparer can't or won't file electronically, that's a warning sign. Paid preparers who do taxes for more than 10 clients generally must file electronically.
It's also the safest and most accurate way to file. Next, watch out for a tax preparer who doesn't ask you for records and receipts. Legitimate preparers need those documents and will always ask you for them, so be prepared.
Here's another warning sign. If a preparer says they can e-file your return based simply on a pay stub, head for the door. They're required to use a W-2 and you'll need to provide it. You also need to understand the rules of representation. If you're audited, CPAs, enrolled agents, and attorneys all can represent you before the IRS in any situation. Non-credentialed preparers, including your cousin Bill who's a whiz with numbers, cannot represent you if you're audited.
The next one goes without saying, but let's say it anyway. Never sign a blank check or an incomplete return. Review the entire tax return and make sure it's complete before signing.
Ask questions if something's not clear or looks inaccurate. Also, any refund should go directly to you, not into your preparer's bank account. To make sure, check the routing and bank account number on the completed return. Now, one way you can avoid any potential problem with your tax preparer is to look for a CPA, enrolled agent, or tax attorney with the Certified Kingdom Advisor designation.
Just go to faithfi.com and click Find a CPA. All right, your calls are next, 800-525-7000. This is faith and finance biblical wisdom for your financial decisions.
We'll be right back. What's most important to you when it comes to choosing your financial advisor? Someone who's aligned with your biblical values? How about someone who will take the time to explain your options? Certified Kingdom Advisors are professionals who meet high standards in competence and integrity, and have been trained to offer biblical financial advice. To find a Certified Kingdom Advisor in your area, visit faithfi.com and click Find a CKA.
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Create your free Faithfi account by going to faithfi.com and click Sign Up to begin receiving weekly wisdom in your inbox. Welcome back to Faith and Finance. I'm Rob West. We're taking your calls and questions today, 800-525-7000. Let's head back to the phones to Naples, Florida. Hi, Dee, go right ahead.
Hi. I was with a broker for about 10 years, and when I signed up with him, I mentioned I wasn't interested in any sin stocks in a money market or anything. And so I just was thinking recently, how do we know with different companies that are picking up what a Christian does not want to have the profits go into support? How do we know if that's the type of company that it is? Because some of these things that are being supported, if they don't support them, they'll end up at possibly the Supreme Court. So I just wondered, is this going to be something we can't do anything about and just not invest?
Or where would we stand and how do we tell the difference? Yeah, I appreciate that question. You know, the exciting thing here, Dee, is that this whole area of faith-based investing is really just exploding in a good way. There's really two ways to go about this, primarily. The two simplest ways are, number one would be to find an advisor who can actually offer faith-based investments. Now, when it comes to what I call faith-based investments, usually that means either, number one, alignment where they would either screen out companies that are misaligned with your Christian values, or they screen in companies who are promoting human flourishing and trying to really seek out companies that are creating value for their investors, but also promoting the common good. Secondly would be what are called impact investments, and those are investments that specifically have not only a bottom line in terms of financial results, but have a kingdom bottom line that they're evaluating them by. And then thirdly would be what's called corporate engagement, where no matter what company you own, you're actually voting proxies and proposing shareholder resolutions to be voted on at a shareholder meeting related to values, topics, and things that are important to you, so that you can actually have influence into the company as a shareholder in alignment with your values. Now for most folks who want to do this, it comes down to that first category. It's around either selecting out companies that are misaligned with your values or intentionally screening them in.
So you could go either one of those two approaches and, you know, I think be very satisfied that you are not only deploying your capital in such a way that you have the potential for it to grow over time in a properly diversified portfolio, but you're also honoring your values and convictions as a believer in the companies that you own. Does that make sense? Yes, it does. It's just another thing to have taken into consideration. Thank you very much.
It is. Well, you're welcome. And so the place I would direct you, Dee, to learn more would be, number one, you could find a certified kingdom advisor at our website, faithfi.com. Just click Find a CKA. And I would ask the CKAs that you're interviewing during that interview process if they can offer you faith-based investments. And then the second thing you could do would be to go direct to those fund families I mentioned. And a great way to do that is just head to our website, faithfi.com, click on the show, and all of those fund families that I mentioned would be listed on that web page, and you could click onto their websites and learn more.
But I think you're on the right track here, and I'm confident you'll find some solutions that fit what you're looking for. Thanks for being on the program today. We appreciate it. All right, let's head back to the phones to Tampa, Florida. Hi, Steven, go ahead.
Hi, Rob. Yes, I'm retiring, Lord willing, in January, and I'm under the old pension, and I want to know whether it's a good idea to take my pension and to pay off my debts that I have, or is it better to put it in an IRA and pay it off little by little, because I'll be hit with the taxes? Yeah, it's a great question. I mean, I think if you do take the pension, you want to roll it into the IRA and the lump sum to avoid the taxes and then only take it as you need it. What debt would you be looking to pay off? Well, my retirement would be just under $400,000, and I wanted to pay off the mortgage, which is going to be about $180,000, and then my car payment, which is about $18,000. Yeah, and do you have enough, either through you pulling, let's say, 4% a year from that pension if you were to roll it to an IRA plus Social Security or other income sources, do you now have enough to cover your budget, including the debt service on those debts?
Yes, my wife is still working, and she's making around $100,000. Okay, and how long do you anticipate she'll work before she changes to whatever God has next? Seven years.
Seven years, okay. Yeah, so perhaps one of the things you all might do is try to sync up the payoff of this debt with her retirement, and that way, as you're entering retirement fully, where both of you are redirected away from your current jobs to whatever, again, God has for you next, whether that includes compensation or not, then you would have all of your debts paid off so that your budget would be as low as possible. That would also allow you to not only save on the taxes because you're spreading the withdrawals out, but hopefully you could fund a good bit of that debt payoff out of current cash flow and try to preserve as much as you can in that pension, especially with the market down. I'd love for you not to have to pull that money out in, say, the next five years. Let's let it recover and try to pay down the mortgage out of cash flow, which means limiting your lifestyle and figuring out what do you need to send extra per year to have it paid off in seven years. You may need to pull some from your pension, but I'd try to pull as little as possible. I think that's my best advice as you think about approaching your debt. Thanks for your call.
To New London, Ohio. Hi, Tim. Go ahead.
Hey, Rob. Thanks for taking my call. Sure. Hey, I have a two-acre parcel across the street from my house, and it's two single-wide trailers put together. I have the opportunity to buy it, but it's going to have to be a cash sale because no banks are going to lend on it. I was wondering if it would be feasible if I should take a heat lock on my property to get it because I do own the five acres next to it.
Yeah. I mean, I love the idea of you picking this up because it's contiguous property. Have you had an appraisal done on it? Do you know what the true market value is? I do know what the auditor assesses of that, and I know what the work is going to take to get it up and running, but I feel like they're just pricing it way too high and being that it's probably going to have to be a cash sale and banks really don't lend on single-wide trailers attached together that are from the 70s, I didn't know if I should really shell out that kind of money just to pick it up because I'm trying to pick up more acreage.
Yeah. Well, I certainly don't want you to overpay, and I don't like you picking up a heat lock, especially with rates so high right now, and so that's kind of a double whammy there where you're paying above what you perceive to be the market value. You know the work that's going to have to go into it, and it doesn't sound like you have quite the liquidity and assets to be able to buy it outright. Let's do this. I want to talk a bit more about this because the last thing I want you to do is to get overextended on this thing and overpay, but I've got to take a quick break, so Tim, you stay right there. On the other side of this break, we'll talk a little bit more about this and see if we can create a plan going forward here.
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If you have money in a retirement account or just a general investing account, you know the stock market can sometimes seem like a rollercoaster, but it is possible to enjoy both profit and peace of mind in investing no matter what's happening in the market. You can see a short video webinar on that topic at soundmindinvesting.org. Since 1990, Soundmind Investing has sought to offer financial wisdom for living well.
soundmindinvesting.org. Are you struggling to fit your faith into your practice as a Christian financial advisor? The certified Kingdom Advisor designation teaches you a step-by-step process to confidently deliver advice that aligns with Christian values. Discover the skills you need to help your clients make a Kingdom impact.
Get started today by enrolling in the CKA educational program at kingdomadvisors.com slash get certified, that's kingdomadvisors.com slash get certified. Welcome back to Faith in Finance. I'm Rob West. Just before the break, we were talking to Tim in Ohio. He's considering buying a piece of property across from him. It's a two-acre parcel with two single-wide trailers that are from the 70s that are attached. He thinks the asking price is too high. He owns the acreage around it, so he'd certainly love to acquire this parcel. Tim, what I was saying was I certainly don't want you to overpay, and I want to make sure that if you were to do this, you have the financial readiness to do it. Let's talk about the asking price for a moment. What do you believe the market value to be, and how have you arrived at that number? I figured at least $40,000 would be a fair price considering the acreage size and the condition of the house, but they're asking $70,000 and we're just too far apart.
Well, I think the key is that you have a real basis and justification. I wouldn't use necessarily the assessed value because often that's well below market. I think the best thing you could do would be to get what's called a broker's price opinion from a real estate broker who could pull comparable sales of land, just straight land or land plus the improvement, which I know you said has very little value, and establish a cost per acre for the property, and then you could value it that way, or you could hire for $200 or $300 an appraiser to come out and give you an appraisal.
That way, what you're taking to the seller is something that has some credibility to it. Potentially, if he understands that, listen, nobody's going to pay this much over market and there's a rationale for how that market value was established, perhaps you get him to meet you at a fair price, and you may find that when you do this not based on the assessed value but based on either an appraisal or a broker's price opinion, perhaps it's worth more than $40, and you'll just have to find that out. But I think that would be step number one because I certainly wouldn't want you to pay that much over market.
You're talking 70% plus over market, which doesn't make any sense apart from I understand this has added value to you specifically because you're a landholder in this area. The second thing would just be your financial readiness, and so to add all of this to your existing property at these high interest rates, I certainly wouldn't have recommended a HELOC two years ago. It's better now because at least you'll ride the interest rates down as they come down, but I don't think they're coming down anytime soon and I certainly wouldn't want you to get overextended. Do you feel like you have the ability to service the debt?
If I did a HELOC, yes. I'm steadily employed and everything's kind of going pretty well financially, but I was just, my major concern was they, their price, they did use the BPO for their price for the house. But I just don't see if anybody really had $70,000 to pay for a cash house. That would be the one they would go for. They'd put that down on something a little bit more live-in ready. Sure.
No, I certainly understand that. I think at the end of the day though, that's just how market values are derived. It's going to come from closed sales that are comparable, but I think when it's all said and done, you have to decide how much it's worth to you and you may find a reason why you're willing to overpay, but I wouldn't jump at that too quickly, especially if you feel like it's that far overvalued. So I'd probably go slow, perhaps consider an appraisal, let this play out over time. If you're right and it's not worth anywhere near that, it's going to still be available and perhaps you'll find a seller who's more willing to negotiate six months or a year from now. You also may find a lot better interest rates at that point.
I expect rates will be in the fives by the end of next year. Perhaps time is on your side here, Tim, and you just wait this out. Certainly make it a matter of prayer and ask the Lord for wisdom. We appreciate your call today, sir. God bless you. To Chicago. Hi, Melissa. Go ahead.
Hi. I live in Cook County and the house that I live in was being over assessed for years. We recently voted in a new assessor. They reassessed all the values of the properties and in the year that we had a new assessor, I wound up paying roughly half of the amount of money in property tax as I was formally paying, which was good. But recently when they revamped the entire system, they made things more transparent and I was able to see how my home was being assessed. It said that I had a basement and an attic and I don't. So with the new online system, I made those corrections to my home and I put in for an appeal on the value because now they're trying to double the value of the home. It used to be around 50,000 consistently and now they want to put it at 90 for tax purposes. But all that time, they were assessing my home as having a basement and an attic when it didn't and it's a much older home.
So it's unique in the area. There aren't, I don't know if there is another house I can find in the area to compare it to, but online I made the corrections, I did an appeal and I just recently got a letter saying that the changes that I made are basically irrelevant because they're using market value assessment to determine the value of my home. And I don't understand how not having a basement and an attic doesn't affect market value assessment, however they're doing it. So I'm wondering what steps I can take at this point. I did the appeal, they came back saying, nope, they're still going to basically double the value of my home. I don't know if it would really sell for that much.
And I live in Cook County so I'm just hoping, I don't know what my next steps would be at this point. Yeah, well you've certainly done the right things and I guess the thing I don't understand is the market value is largely driven by the comparables, but the comparables have to be adjusted for the features of your home, the number of bedrooms, whether or not you have a basement. All of those things are factored into establishing the market value and as they compare your property to the other comparables, they're going to have to make subtractions for the things that your house doesn't have that the other houses do. That's just the way that works. So your next step if you've gone through the appeal process, gotten the verdict you're not satisfied with, would be to take your case to the appeals board and then you're going to actually go before that board who are elected officials who vote on these matters and share your justification why you think this is not right and you're going to need to have all of your evidence and build your case.
So I would contact the county appraisers office and ask about going before the board to actually make your case for this situation. Well once again, our time went by way too fast, but tune in next time and we'll do it all over again. Before we go, I'd like to thank our incredible production team, Amy, Devin, Jim, Robert, Brandy, Rob, and Ben, couldn't do it without them. Have a great rest of your day and I'll see you again next time for another edition of Faith and Finance. Faith and Finance is provided by Faith Buy and listeners like you.
