Unclaimed Property - Why Does the State Have My Money?

You've probably seen it somewhere. Maybe one of your friends posted it on social media. Perhaps you saw an article about it. The state you live or lived in just might have some money or other property that belongs to you – unclaimed property. I thought I’d put together a brief Q&A to highlight the major points of what unclaimed property is and how it works.

What is unclaimed property? It can be things such as money (cash or checks), investments, and tangible items that didn’t make it to their rightful owner.

How did the state end up with it? All 50 states have unclaimed property laws on their books. Businesses are required to report unclaimed property on a form prescribed by the state. They have to list each item along with pertinent information such as the rightful owner’s name, last known address, social security number, description of unclaimed property, etc. Examples of items include uncashed checks, abandoned safe deposit box contents, and abandoned bank accounts with a balance. They submit the form along with remittance of the total value of the abandoned property. If the item is tangible, it’s surrendered to the state. The state now has the money or tangible item.

When does a business have to report an item as unclaimed? It depends on the state and the item. For Arizona, a check is considered unclaimed if it hasn’t been cashed for 1 year. Safe deposit box items are deemed abandoned if the owner doesn’t claim the items 3 years after the lease period on the safe deposit box ended. Check with your respective state’s laws for their “presumptions of abandonment”.

How does the state ensure businesses are reporting unclaimed property? Not too long ago, the answer to this question would be, “Not much”. If you think about it, it would take nothing short of an audit of EVERY business in the state to determine compliance. That’s a lot of manpower. So, audits are selective. Businesses that have never filed an unclaimed property report, especially established businesses, raise a red flag to the state. Many states have also imposed severe penalties for noncompliance – so severe that it’s in the organization’s best interest to file. It’s not a perfect, fool-proof system, but it’s an improvement.

How do I find out if I have any unclaimed property? Go to www.missingmoney.com. It’s a centralized website where you can search multiple states’ databases for unclaimed property. Not every state participates, but the site gives you links to the non-participating states’ unclaimed property websites.

I have property to claim. What’s next? Complete the claim form provided by the state that has your property and follow any instructions that come with it. You might be required to submit additional documentation. The Missing Money website has all the resources you need to help you get your property back.

Preparing for the Worst

It's a difficult topic to discuss - a sudden, unexpected, and premature death. I’m writing this article to specifically address the issue of preparing members of the household who don’t manage the finances who, suddenly, have to manage them due to the death of the person who did. It could be a spouse, sibling, parent, child, friend, or anyone for that matter. It’s hard enough to deal with the grief and loss. It’s even harder to deal with if the electric company cuts your power due to an unpaid bill or collectors start harassing you for debts you’re not intimately familiar with.

I manage the household finances. Although my husband is perfectly capable of doing it, he gladly lets me since I enjoy it. I’m an accountant, after all. But, I started thinking, “What if something happened to me?” “Would he know what to do?” He’s originally from South Africa so things like Social Security are a new concept to him. It’s so hard to think about, but I decided I needed to do something that would help him get through that possibility. Here’s what I did.

Basic Information. I put together a spreadsheet that centralizes all the information my husband would need to know about me and the household bills along with a handful of general instructions. This includes the following:

• Reminding him to not make any major financial decisions for 6 months, like selling the house
• Instructing him to collect the life insurance proceeds and not let the insurance company convince him to buy another policy
• Instructing him to get 20 to 25 copies of my death certificate
• Basic personal information (date of birth, place of birth, social security number)
• Life insurance information (name, phone number, and address of insurance company; policy number; policy value) to get the claim started
• Social Security Administration phone number to apply for surviving spouse benefits
• Information such as phone numbers and account/policy numbers for home-related bills (electric, gas, internet, cable, mortgage)
• Information relating to vehicles (where the titles are located; insurance company name, phone number, and policy number)
• All bank, credit card, and consumer loan information (financial institution name, phone number, and account number)
• Things to cancel because they’re relevant only to me (e.g. iTunes, eBay, Paypal, Amazon)
• Board of Accountancy phone number (to inactivate my CPA license)

Online Information. On the second tab of this spreadsheet, I listed every online account I have so my husband can log in and make changes or inactivate the account. It has a link to the login page and information such as username, password, security question answers, and a description of what the account is if it’s not obvious. The most important one is my e-mail account. Since we’re paperless, we literally get no bills in the mail. They all go to my e-mail. If he doesn’t have access to that, he’s a goner. Alternatively, he can log into each account and change the delivery option from paperless to regular mail.

Other Tips. Although my husband and I have joint bank accounts and the mortgage is in both of our names, not all the bills have both our names on them. In cases like that, I made sure to add his name to the “authorized person” list where he can call and the company will speak to him about the account. I wanted to ensure that it will be easy to access everything with minimal hassle. Also, because we’re paperless, I’ve saved every document you can think of on one memory stick. So, if I missed anything on the spreadsheet, there’s no doubt a document somewhere on that memory stick that will cover those gaps.

Final Thoughts. I hope telling you what I did gives you a good general framework to help you prepare a “what if” document that is suited to your personal situation and structure. This is the way I think about it. People are grief-stricken when a loved one passes away. They don’t think straight. It’s difficult to think. Tasks that are easy seem monumental. The last thing they want to do is go through file cabinets, drawers, closets, and wherever else to compile all the information they need just to keep the lights on. Make it easy on them. Preparing a “what if” document will truly be a gift.

The Home Office Deduction Simplified

Calculating the deduction for a home office on your income tax return used to be a burdensome task. Luckily, the IRS now offers a simplified option to ease that burden. Although it does not change the criteria for who may claim the deduction, it gives individuals and home-based businesses an easier way to calculate and support the amount deducted.

The New Simplified Method. Once you have determined you are eligible to take the deduction, take the square footage of your office space and multiply by $5. That’s it. The maximum amount allowable is $1,500, or 300 square feet. This is an annual amount, not monthly. 

The Regular Method. The regular method entails capturing home expenses such as utilities, mortgage interest, and depreciation and then prorating it based on what percentage of your home is used for business purposes (e.g. square footage of your office divided by total square footage of your home). 

Pros and Cons. One benefit of using the simplified method is you only have to substantiate the square footage of your home office space in the event of an audit. With the regular method, you would have to produce documents supporting the amounts of your home expenses. In addition, I believe using the simplified method reduces the chance of an audit because there are fewer numbers that can be “fudged”, which the IRS likes. The only immediate caveat I see is that the simplified method might yield a lower deduction amount. It depends on your specific situation and how much your home expenses are. Just remember that if you use the regular method, the amount of expenses such as mortgage interest and property taxes paid will be separated out between Schedule A and Schedule C instead of the entire amount being reported on your Schedule A only. This creates additional work for you and your tax preparer.

For more information about this deduction, click HERE to review an IRS recap of the two methods.

For more information about the requirements to claim a home office deduction, click HERE.

If you still aren’t sure which method is right for you, consult with your tax accountant.

Cutting Down on Heating and Cooling Expenses

The cost of heating and cooling your home can add up. If you live in a hot climate like I do, your air conditioner does double duty and racks up the kilowatts in the summer. You can, however, put several measures in place to control these costs. 

The Thermostat. Installing either a programmable or automated thermostat is useful. Either will help you control the temperature and ensure a budget-friendly setting is in place when no one is home. If you have a two-story home and run two units, set the thermostat downstairs to one degree lower than your target temperature and the one upstairs to one degree higher than your target temperature. This arrangement facilitates your units to work in tandem with each other instead of against each other. 

Air Filters. Using cheaper air filters can also be a benefit. The more expensive ones are great, especially if anyone in the home has allergies or sensitivities. The con is that your unit works harder to bring air in because of the thickness of those filters. Air conditioning professionals have various opinions about what filter to use, but I find using the cheaper air filters works just fine for my particular case. 

The A/C Unit. Keeping your unit clean and well-maintained will keep costs in check as well. Lightly spraying the condenser coil of your unit and rinsing out the dirt and debris will keep air flow running smoothly through the coil. A dirty coil hinders air movement, making the unit work harder. A yearly inspection of your unit is always advisable too. Contact your utility company to see if they run specials on annual maintenance services. The specials usually run in the late spring, before you’re ready to switch on the A/C. 

Insulation and Duct Sealing. Another thing to consider is checking the level of insulation in your attic and how well your ducts are sealed. If you have fewer than 12 inches of insulation in your attic, it could be a problem. Rectifying these issues is expensive, but you save a lot of money in the long run. I did it for my home during the summer months and my electric bill went down by almost $100 the next month, and the temperatures were even higher than the previous month! Many utility companies offer rebates for making your home more energy-efficient and some expenses even give you a tax credit on your tax return. I received over $1,000 in rebates and a $122 tax credit for installing attic insulation and solar screens and sealing the ducts. Call your utility company and request an energy audit on your home to see where the inefficiencies are in your home and if the company offers rebates. 

Window Treatments. By no means do I keep current on window treatments, but I do know that blackout honeycomb shades are great at keeping the heat or cold out as well as keeping the light out! I have a set of non-blackout honeycomb shades in the water closet and I can feel the heat emanating from the window in the summer. The blackout shades…no heat at all. 

Time-of-Use Plans. If your utility company offers time-of-use plans, look into it. They’re not for everybody. Many people don’t want the restriction of when they should and shouldn’t do high-powered activities like laundry, running the dishwasher, and cooking. I’m on a time-of-use plan and I have had a few months where I actually paid more for being on the plan than not being on any kind of plan at all. The amounts were small and I’ve saved money life-to-date being on the plan so I continue to subscribe to it. 

Equal Payment Plans. Many utility companies offer the option of paying the same amount every month regardless of the actual bill amount. They periodically average out your actual usage and make adjustments to your payment to make sure you don’t get too far ahead or behind. If your income stream is more or less the same amount each month, enrolling in the equal payment plan makes sense. Your bill is completely predictable, making it easier to budget. 

The Proof. I have employed all of these strategies in my home. I have a 2,600+ square foot 2-story home with two A/C units and no swimming pool. I pay $74 a month for electricity and $47 a month for natural gas. I’m not disclosing this to brag in any way, but to demonstrate that these strategies work! So the question is…how low can you go?

Protecting Your Wireless Home Security System

Home security systems have now become wireless, which makes installation, maintenance, and operation a lot easier. It comes with a price, however. Because of the system’s dependence on your home wi-fi to communicate any issues, a power outage can be trouble. No power equals no router and/or no modem.

I thought to myself, “What would stop a burglar from finding my breaker box and just shutting everything down?” Even if there’s a lock on the box, a pair of bolt cutters would solve that problem fairly quickly. If the alarm system has no wi-fi, it won’t work unless it either has cellular capability or, in the case of alarms using VoIP, the technology to maintain connectivity.

Photo courtesy of Amazon

Plugging your router and modem into a battery backup system will eliminate this weakness. Depending on the system, it will keep them running for at least an hour; long enough where a potential crook isn’t going to wait around for the backup to drain out. If the crooks are less advanced, they might assume the alarm is nonfunctional and break into the house just to have the alarm blare away, to their surprise.

If you have a wireless alarm, check with your security company to see if cellular or other technology is utilized to maintain connectivity during power outages. If not, seriously consider purchasing a battery backup system to give you an additional layer of protection against potential thieves. It’s a small investment to make to protect your belongings and increase your peace of mind.

Feasible Decluttering

Decluttering your home can be a monumental task, especially if you feel that there’s too much “stuff” in it and you don’t know where to start. Hiring a professional organizer is an option, but can be rough on the pocketbook. Here’s a few tips and thoughts about decluttering your home without the help of a professional.

Chaos creates chaos. If you feel like your thoughts or general mindset are a bit chaotic, take a look around you. Are you looking at clutter all day? Unorganized stuff looks chaotic and I really believe it takes a toll on your mind and psyche. If you’re an especially visual person, the effect can be even greater. A chaotic environment creates a chaotic mind and could make you feel nervous, uneasy, closed in upon, or held down.

Don’t make a grand plan. I highly advise NOT making a plan or schedule to declutter your home. Why? Because all it takes is one off day and the schedule is out of whack. Then you feel either guilty or like you’re behind the eight ball. As a result, there’s a higher likeliness that the plan will get completely scrapped. Just work on your home when you can and make a sincere effort to do it consistently. Try one task a week at first. If you feel like you can do more, try two a week.

Do it in workable chunks. If your entire home needs decluttering, thinking about how to tackle the whole thing is overwhelming. Thinking about decluttering one closet? Not as much. And don’t feel like you can’t move on until an entire room is finished. One day you might feel like organizing kitchen stuff. The next day, maybe not. Perhaps tackling the bookshelf sounds more appealing that day. Make it as enjoyable as possible so you can get through to the end result – a clutter-free house!

It gets messier before it gets cleaner. Whenever I reorganize and perform my annual “purge”, it looks like a tornado went through the area. At the end, though, it’s all good again. If, for example, you’re working on a closet, take everything out of it. Everything. Lay it all out on the floor. Get boxes or bags and start separating everything into four categories: keep, give to charity, throw out, and not sure. Once everything is in a box or bag, go back through the “not sure” and make a decision. That part might take a while. After that, get the “give to charity” and “throw out” items out of the area and focus on putting the “keep” items back in the closet.

The 6 month rule. As you’re going through your stuff, ask yourself, “Have I used or noticed this in the past 6 months?” If the answer is no, consider donating it or throwing it out. This, of course, does not apply to holiday and seasonal items. I don’t want to see anyone throwing out their Halloween cookie cutters because they’re reorganizing in August.

Keep your camera handy. Last year, my mother went through my Grandma’s attic and gave me a box she found full of trophies I earned or won when I was younger. It was great going through it and reliving some of those memories, but I had no intentions of displaying them. Ever. Instead, I took a photo of each trophy so I could always look back on them if I ever felt nostalgic. I then removed any engraved personalized plaques and put them in the “give to charity” box. People do buy trophies at thrift stores. They’ll use them for a work function and give them away for things like “Ugliest Sweater” at the office holiday party. It’s cheap for the company and brings smiles to the employees. If you come across an item that falls in that category where it holds a little bit of nostalgia, but you’ll never actually do anything with it, take a photo and allow it to get repurposed or enjoyed by someone else.

Don’t discount spaces that aren’t conspicuous. Sure, no one but you and your family see what’s in that junk drawer in the kitchen. That doesn’t make it any less important than a place that’s more conspicuous. Decluttering a “hidden” area like a junk drawer is just as important because YOU now know it’s organized. You will feel the satisfaction regardless if anyone outside of your home ever sees it.

I hope these tips help inspire you to start organizing your home. I’d love to hear your comments about your decluttering experience!

Starting From Scratch: My First 90 Days of Entrepreneurship

It's been just over 3 months since I launched my website and, in turn, my business. There seems to be a level of curiosity about what it’s like to start a business, so here’s the lowdown on how I’ve spent my time and what I’ve done to promote and grow Organized Piggy as well as my general thoughts and opinions. 

Money. Let’s briefly talk about money. I am literally starting from scratch as the title suggests. Due to life events, I have nothing in savings. I have little income coming in. What this means is that I’ve had to be very choosy as to what I spend my money on when it comes to investing in the business. 

Website. One of the things I did invest in is purchasing a domain, a web development platform, and business e-mail. After some research and testing, I decided to use Wix as my web development platform. I found it was the easiest to use and comes with a lot of useful tools and widgets I can use on my website. Wix is partnered with Google so my business e-mail runs through Google and uses my domain, which is a plus. I think people take you more seriously if your e-mail address is your domain versus a free Gmail account or the like. Actually, I think it shows that YOU are serious about your business. It took many hours to write the content and choose photos for the website. It took many more hours to design the website. One way I lucked out is that my husband is a photographer and a graphic designer. He worked for ad agencies for many years and is extremely skilled in layout. I initially developed the website, but then handed it over to him for fine tuning. And it didn’t cost me anything. HUGE plus! 

Research. Since I don’t have the funds to hire a business coach or marketing firm, it’s all up to me to figure everything out. A chunk of my day is devoted to research via reading articles and watching YouTube videos. I read articles about what to put on a business card and what not to before I designed and printed my own. I researched methods on how to attract YouTube subscribers and LinkedIn followers. I learned about how to network effectively; what social media outlets to use and how to use them; creative and cheap ways to market yourself; using Google Analytics; the best blog sites to use; and much more. In fact, just yesterday I watched a one-hour video about SEO. More on that later. 

Networking. I can’t get business sitting behind my computer all day writing blogs and making videos. Nothing beats the good old-fashioned face-to-face: networking. My goal is to attend at least two networking events and meet up with at least one person for lunch or coffee per week. So far, I’m doing great on the networking event part and have had mixed results with the meetup part. Some people don’t get back to you or are unavailable. For me, there are three types of networking: direct, indirect, and mixed. I don’t know if these are official terms, but that’s what I call it. 
 

Direct Networking. This means attending events where the majority of the attendees are your target market. For me, this is small businesses. One thing I did was look on the Registrar of Contractors website for a list of trade associations (e.g. electricians, plumbers, masons). From there, I contacted the associations directly and asked if they had events or meetings where “vendors” could come and pitch their business. Six hours later, I had a calendar full of events to attend. Because of the direct contact I had with them, many of them invited me to come free of charge. Yes, some of them cost money to attend. One association didn’t have meetings, but offered to place a free ad for me in their monthly newsletter. To date, I’ve only had to spend $10 out-of-pocket on attending these events. I’ve come to discover that when you take the time to tell someone about yourself and what you’re trying to accomplish, most of them will help you as best they can. 

Indirect Networking. This means attending events where the majority of attendees are people who are in contact with your target market and can give you referrals. For me, business bankers and financial advisors are the ones to know. Their clients are small businesses or people who have a large enough financial portfolio where they might need assistance keeping it organized or maybe they want to go paperless. 

Mixed Networking. This is a cross between the first two. I have been loving Meetup.com to find networking groups located in my part of town and have already found a wonderful group with people who truly want to network and aren’t just there to get referrals and not give any. Another thing I like is that I get a chance to talk to other entrepreneurs and pick their brains and ask questions. I have gained a lot of valuable insight from these chats. Networking isn’t always about pitching your business. Actually, it’s rarely about the pitch. It’s truly about building relationships, gaining trust, and promoting commerce for all parties involved.

Keeping Track. When I get home from an event, I invariably have quite a few business cards. The first thing I usually do when I get home is load all that information into my Google contact list. I also write notes like where and when I met them and some piece of information to help me remember who everyone is (e.g. where they’re from originally, a funny story they told). I then e-mail everyone a personalized message and connect with them on LinkedIn if I can find them. For people who I think are super valuable connections or showed an overt interest in my services, I’ll ask them if they’d like to meet up for coffee or lunch in the near future. I’m not trying to assign “value” to people, but I just can’t meet with them all. And not all of them want to meet up with me. I then monitor my e-mail communications to see who has responded, who hasn’t, and then follow up with the non-responders a couple weeks later if I still think it’s worth it. So, when I get home from a 2 hour event, it takes me another 2 hours to do all the follow-up, sometimes longer. I DON’T send canned e-mails, nor will I ever. 

Making Friends with the Competition. That sounds like a dumb idea, but it’s not. At least, not for what I do for a living. I had lunch with a woman who owns a business very similar to mine, but not exactly. It’s close enough. What I did discover, however, is that no one in her practice was experienced in construction accounting. In fact, if a potential client approaches her and they’re in construction, she’s calling colleagues to see if anyone has that expertise. It just so happens that the majority of my experience is in construction! My hope is to stay in touch with her and that if she ever does get another construction company knocking on her door, she’ll keep me in mind. You never know. 

SEO. I had no idea what SEO was until I started building my website. I ignored it at first, knowing it wouldn’t hold up publishing the site. Then, when I started going to networking events, there were people there who did SEO for a living. That’s all they did! I realized I needed to research this thing. SEO is search engine optimization. It’s a set of algorithms Google uses to rank websites when people do keyword searches. The basic gist is if you want your website to be listed on page 1 of Google’s search results, you need to know SEO. Before yesterday, I thought Hummingbird, Penguin, Panda, and Pigeon were just animals. They’re the names of the algorithms Google uses. During my research of SEO, I also learned new words like schema, click through rates, H1 headers, demoters, long tail keywords, and negative SEO. I have a lot more to research, but I know more today than I did last week. If you ever have a website, either hire an expert or do a lot of research. SEO can’t be ignored. Don’t be like me. 

So How Am I Doing So Far? Right now, I have one bookkeeping client. I did a resume rewrite for someone and I’m also helping a pair of friends write a business plan. It’s slow, but that’s to be expected. It takes a long time to build relationships. It’s critical for my line of work since I’m dealing with people’s money! That takes a lot of trust and that takes time. I can’t expect to meet someone once and they’ll just magically give me referrals or call me and want to retain my services. 

The Emotions. It’s stressful starting a new venture. My mind is always running, around the clock. I’m thinking about what to write next on my blog, where I can look to find another networking group, how to make my website better, what other topics I need to learn more about, etc. I also get some social anxiety going to unstructured mixer-type networking events. Sure, I can stand on a stage and speak to hundreds of people no problem, but it’s very difficult for me to approach a stranger and introduce myself. I just tell myself “too bad” and suck it up. There is no other choice if I want to do this. And then there’s the bad days. I’ve gone to events and ended up driving home practically in tears because no one was interested in talking to me. And sometimes, I get a little voice inside my head that tells me I can’t do it. I’m going to fail. Those days are the worst. So what keeps me going? I truly believe in what I’m doing. One thing I do know is that I’m an excellent accountant. I also know that I care about people and small businesses. I want to see EVERYONE succeed and if there’s anything I can do to help, I want to do it. 

Final Thoughts. If you want to start your own business, loving what you do is an absolute must. Your conviction and enthusiasm will show in your vibe and your voice and it will attract people. If you have limited funds, you have to be resourceful and willing to put in the time and research to accomplish things that aren’t in your area of expertise. Follow up with people. A fellow entrepreneur told me that people aren’t very good with that. So be good with it! People will remember you. It will take about a year to see the fruits of your labor, so strap in and enjoy the ride. And above all, don’t let doubt steer you into a knee-jerk decision or, worse yet, make you give up. You CAN do it!