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Many might assume that an attorney would have all the answers. That was not the case with Lott Rolfe. The 35-year-old from Little Rock, Arkansas, had a whole battery of questions about his finances: How could he and his wife, Terry, crank up their retirement savings? What kind of Individual Retirement Account was right for him? And how could he and his wife get their daughter, Taylor, 8, and son, Austin, 5, started on the path toward a secure financial future?
Not that the Rolfes were slacking by any stretch. Rolfe helps head his own firm, Rolfe Law Firm, and his wife, 36, a former DNA analyst at the Arkansas State Crime Lab, is now a stay-at-home mom. But finances can be a confusing maze, and the Rolfes needed a little guidance in getting through. So in 2006 and with the help of a financial planner, they got serious about their finances. Since then, they’ve boosted their retirement savings by setting up IRAs to complement their existing 403(b) plans; established 529 college savings plans for their children; and are working toward building a $2 million nest egg.
“We don’t want to have to work at age 70,” says Rolfe, who specializes in criminal defense and family law. “We want to have our kids set up for their educational expenses, be able to sit down and enjoy life, and achieve dreams like going on an African safari. Most of all, we want the freedom to do whatever we want to do.”
Rolfe’s financial concerns are shared by countless Americans. In fact, here at black enterprise, we get financial questions all the time from readers. That’s why we’ve compiled a guide to 10 of the most common queries that we receive. With the help of financial planners, credit gurus, retirement savings experts, and folks who have dealt with these head-scratchers themselves, we’ve come up with the best strategies.
I can’t pay my tax bill; what do I do?
Having the Internal Revenue Service on your back is like living in a nightmare. Unfortunately, you’re not going to be able to wake up. Filing for bankruptcy is likely not going to erase some types of debts, such as child support, student loans, or back taxes. And the late charges and penalties involved can multiply what you owe many times over, dwarfing the initial amount. Your only real solution is to contact the IRS and request a payment plan. The government would rather get the money over a long period of time than get nothing at all, so you might be surprised by how receptive it is to setting up an extended payment plan (60 months, say) with a reasonable interest rate. If you’re in dire economic straits, contact the Taxpayer Advocate Service at 877-777-4778, to find assistance from someone in your area.
If you can afford it, having a tax attorney working on your behalf might also be a huge help. She will know the intricacies of tax law and might be able to negotiate a lower balance.