Planning for the Transition to a Single Income Household

Planning for the Transition to a Single Income Household

Going from two stable income streams to one can prove challenging, but it is a necessary step if you, or your spouse, want to stay home with your kids, go back to school or even start your own business. To avoid ending up in a pinch when the big day comes, planning for the transition to a single income household is a must. You can ensure the transition goes smoothly by making the right changes ahead of time.

As you set up your household for success, you can move forward with confidence that everyone will thrive in your new financial climate. The following tactics can help ease the transition to a single income and help your household thrive.

Map Out Your Budget

Before you can switch to a single income, you have to figure out if it is even doable for your household. You can run the numbers to see if the incoming funds will cover your bills and other expenses for each month. Do not forget to add in infrequent expenses, including pet checkups, dental care copays and car tabs, to your budget for the year. If the funds do not cover your bills, you will need to see where you can make adjustments, such as reducing your power bill or cutting your cable service. Once you have a realistic and manageable budget mapped out, you can start to live on it to see how it goes for your household.

Switch to Living on One Income Early

Well before your intended job change goes into effect, it is important to start to practice living on a single income. You will likely need to change your approach to paying your bills, going grocery shopping and even buying clothes to make a single income work. These things take time to learn, and it helps to start early to give yourself room for mistakes. In the meantime, your second income will go unused, giving you an opportunity to pay down debt and increase your emergency fund.

Increase Your Emergency Savings

If you do not have at least 12 months of living expenses tucked away in case of an emergency, then padding this fund should be a top priority. The money you save while working, yet living on a single income, should go directly into your emergency fund to better protect your household from devastation. This will ensure that you remain ready for anything that comes your way, despite having limited funds coming in each month.

Pay Off Debt Balances

Once you have built an adequate emergency fund, you can direct your funds to quickly pay down debt. You can eliminate many monthly expenses by completing paying off the balances of credit cards, personal loans, student loans, auto loans and other open accounts. The elimination of debt can also reduce stress as you aim to stick to a single income budget each and every month.

Maximize Your Retirement Contributions

When you switch to one income for your household, your retirement savings progress could slow considerably. While you have the funds to work with, aim to maximize your contributions for yourself and your spouse. Setting yourselves up for future financial security will pay off big time in the long run and is always well worth the effort.

Speak with a Tax Planning Professional

You will likely need to make some adjustments to your normal tax procedures as well, so it is important to speak with a knowledgeable tax planning professional. Tax experts will assist in helping you find the best approach to your taxes now that your household only operates on a single income. You can receive helpful advice about changing your W-4 withholding, for example, maximizing the money flowing into your household without compromising on tax compliance.

Adjust the Household’s Insurance Coverage

Switching to a single income does not just come with a decrease in incoming funds. It can also come with the need to find alternative health and dental care coverage. The entire household may need to switch to coverage offered by the breadwinner’s employer, resulting in additional costs to consider. The change in insurance will also come with different coverage levels, eligible services and provider lists.

Consider Short-Term Disability Insurance

If the solitary income earner in the household suffers an illness or injury, they could end up out of work for an extended period. During that time, your household will have to subsist on your emergency savings, hoping nothing else comes up in the meantime. You can avoid the stress by investing in short-term and long-term disability insurance from a trusted provider. This type of coverage ensures your household receives a modest cash flow while the breadwinner remains out of work.

Pursue Side Hustles for Extra Cash

Hobbies can quickly turn into extra cash when you can sell your wares to your community. From soap-making to creating flower arrangements, the sky is the limit in generating cash for your household. The money does not have to come in regularly or in great quantities to be helpful, either. You can cover sporadic expenses, boost your retirement savings and bolster your financial health — all while having a great time.

Make Open Financial Communication a Priority

To make living on a single income work for everyone in the household, there must be open lines of communication to discuss financial worries and woes. You can make open communication about finances a priority by setting aside time to talk with your spouse on a regular basis. You can discuss the various ways the cash flow switch works, and doesn’t work, and then find ways to enact changes. By continuing these discussions, and making adjustments to your approach, you can make this switch a way of life that truly works for everyone in the household.

As you integrate these tactics into your plan for transitioning to a single income household, you can ease into the change with confidence. You can even continue to achieve your savings, retirement and debt repayment goals while making this important transition. As you get your personal finances under control and make the most of your cash flow, you can turn your focus toward your initial reason for switching to a single income.


Isler Northwest LLC is a firm of certified public accountants and business advisors based in Portland, Oregon. Our local, regional, and global resources, our expertise, and our emphasis on innovative solutions and continuity create value for our clients. Our service goals at Isler Northwest is to earn our clients trust as their primary business and financial advisors.

Isler Northwest

(503) 224-5321

1300 SW 5th Avenue
Suite 2900
Portland, Oregon 97201

How QuickBooks Protects Your Data, and How You Can Help

How QuickBooks Protects Your Data, and How You Can Help

The data in your QuickBooks company file contains some of the most sensitive information on your computer. Make sure it’s secure.

Your customer list is gold. And those Social Security and bank card numbers in your payroll, client, and vendor records need to be protected from intruders and only viewed by authorized employees.

It’s not just large corporations and financial institutions that get hacked. That’s what the bad guys want you to think. In reality, small businesses are often the victims of data breaches because their owners think they’re immune from data theft and destruction.

Even if you’re password-protecting your PCs and running antivirus and anti-malware software, there’s more you need to do when it comes to your accounting records. Here’s what we suggest.

Restrict access by setting up user permissions.

If you have multiple staff members using QuickBooks, don’t share the same user name and password. That obviously gives everyone access to all data and activity. If something goes awry, you have no way of knowing when or how it happened, and who was responsible. To protect yourself and everyone else who logs in, it’s critical that all users have their own unique logins. They should only be allowed to access information and functions that relate to their job duties.

Sales & Accounts Receivable

You can restrict QuickBooks users to certain screens and activities.

To assign these permission levels, open the Company menu and click on Set Up Users and Passwords, then Set Up Users. This opens the User List window, where you should be identified as the Admin. Click Add User. Enter a user name and password for an employee who needs access (this can be changed later). Check the box in front of Add this user to my QuickBooks license.

Tip: Not sure how many users are allowed under your current license? Click F2 and look in the upper left corner. If you need to add licenses, let us know.

Click Next. The next screen lists three options. You can grant access to all areas or to selected areas. You can also create a login for us as your external accountant, which lets us see everything except sensitive customer data. Select the second option and click Next. You can see in the image above that you can give the employee different levels of responsibility. When you’ve made your choice, click Next. The subsequent nine screens deal with different areas of QuickBooks and their related activities.

Tip: When you need to change your password, which you should do at a minimum every three months, go to Company | Set Up Users and Passwords | Change Your Password.

Save your company file elsewhere.

You should always be backing up your company file to an external storage device (like a CD or thumb drive).  To set this up, open the File menu and select Back Up Company, then Create Local Backup. This window will open:

The Create Backup window

The Create Backup window

Make sure Local backup is selected, then click the Options button below (not pictured here). Click Browse to see a directory of your PC and select the correct destination. Leave the two boxes below it checked; this will add the backup date/time to the filename and limit the number of backup copies to three.

By default, QuickBooks will remind you to back up your file every fourth time you close your company file; you can change this number if you prefer. Leave the Complete verification option checked and click OK, then Next. Specify when you want to save your backup copy and click Next again. You can schedule regular backups of your company file on the next screen if you’d like. When you’ve completed this screen, click Finish.

You should also consider saving a copy of your company file to the cloud. Intuit offers its own service for this; it costs $9.95/month or $99.95 annually, but it gives you 100 GB of storage space, so you can back up other critical business files, too.  If you can’t swing this financially, at least store your backups to a portable device that you can carry offsite.

Warning: If you already pay for cloud storage from another vendor, don’t assume you can just copy your QuickBooks file to it. Talk to us.

Other Steps

There are other things you can do to protect your QuickBooks data, including:

  • Insist on strong passwords. Yes, it’s a pain to create and remember them, but it’s critical here.
  • Keep everything That includes your operating system and anything else that requires updates.
  • Minimize web browsing on work computers and remind employees about smart email behaviors.

We strongly recommend that you consult with us as you’re setting up any kind of backup system for QuickBooks. The software’s instructions are straightforward, but we don’t want you to do anything that would jeopardize the integrity of your company file.


Isler Northwest LLC is a firm of certified public accountants and business advisors based in Portland, Oregon. Our local, regional, and global resources, our expertise, and our emphasis on innovative solutions and continuity create value for our clients. Our service goals at Isler Northwest is to earn our clients trust as their primary business and financial advisors.

Isler Northwest

(503) 224-5321

1300 SW 5th Avenue
Suite 2900
Portland, Oregon 97201

Gift and Estate Tax Primer

Gift and Estate Tax Primer

The tax code places limits on the amounts that individuals can gift to others (as money or property) without paying taxes. This is meant to keep individuals from using gifts to avoid the estate tax that is imposed upon inherited assets. This can be a significant issue for family-operated businesses when the business owner dies; such businesses often have to be sold to pay the resulting inheritance (estate) taxes. This is, in large part, why high-net-worth individuals invest in estate planning.

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May 2019 Due Dates

May 2019 Individual Due Dates

May 10 – Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during April, you are required to report them to your employer on IRS Form 4070 no later than May 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

May 31 –  Final Due Date for IRA Trustees to Issue Form 5498

Final due date for IRA trustees to issue Form 5498, providing IRA owners with the fair market value (FMV) of their IRA accounts as of December 31, 2018. The FMV of an IRA on the last day of the prior year (Dec 31, 2018) is used to determine the required minimum distribution (RMD) that must be taken from the IRA if you are age 70½ or older during 2019. If you are age 70½ or older during 2019 and need assistance determining your RMD for the year, please give this office a call. Otherwise, no other action is required and the Form 5498 can be filed away with your other tax documents for the year.

May 2019 Business Due Dates

May 10 – Social Security, Medicare and Withheld Income Tax

File Form 941 for the first quarter of 2019. This due date applies only if you deposited the tax for the quarter in full and on time.

May 15 – Employer’s Monthly Deposit Due

If you are an employer and the monthly deposit rules apply, May 15 is the due date for you to make your deposit of Social Security, Medicare and withheld income tax for April 2019. This is also the due date for the non-payroll withholding deposit for April 2019 if the monthly deposit rule applies.


Isler Northwest LLC is a firm of certified public accountants and business advisors based in Portland, Oregon. Our local, regional, and global resources, our expertise, and our emphasis on innovative solutions and continuity create value for our clients. Our service goals at Isler Northwest is to earn our clients trust as their primary business and financial advisors.

Isler Northwest

(503) 224-5321

1300 SW 5th Avenue
Suite 2900
Portland, Oregon 97201

Could Your Sales Invoices Be Better? How QuickBooks Online Can Help.

Could Your Sales Invoices Be Better? How QuickBooks Online Can Help.

Every interaction with your customers can enhance your image. Here’s how QuickBooks Online contributes to that.

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Defer Gains with Qualified Opportunity Funds

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If you have a large capital gain from the sale of a stock, asset, or business and would like to defer that gain with the possibility of excluding some of it from taxation, you may want to check out the new investment vehicle created by tax reform, called a qualified opportunity fund (QOF).

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Resolve to Do These 3 Things in QuickBooks Online This Month

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‘Tis the season for making resolutions and setting goals. Try exploring these three areas to dig deeper into QuickBooks Online.

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2019 Standard Mileage Rates Announced

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The Internal Revenue Service (IRS) computes standard mileage rates for business, medical and moving each year, based on a number of factors, to determine the standard mileage rates for the following year.

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Making Two IRA Rollovers in One Year Can Be Costly

Article Highlights:

 One Rollover per Year Rule

  • Exceptions
  • Tax Consequences
  • Disqualified Rollover
  • Early Withdrawal Penalty

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Reasonable Compensation and S Corporations

Article Highlights:

  • Payroll Taxes
  • Corporate Officers
  • Employees of a Corporation
  • Reasonable Salaries
  • Factors
  • Flow-Through Deductions
  • Wage Limitations

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