Taxes en-US 6 Things the IRS Doesn't Want You to Know About Them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-things-the-irs-doesnt-want-you-to-know-about-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="irs" title="irs" class="imagecache imagecache-250w" width="250" height="135" /></a> </div> </div> </div> <p>&quot;The rich and the poor are alike; they both worry about taxes.&quot; &mdash; Anon</p> <p>There is perhaps no entity disliked more than the Internal Revenue Service (IRS). It feels the brunt of our disdain during the late winter and early spring each year and &mdash; for some unfortunate souls &mdash; far beyond into the future. The IRS has become the punchline to many jokes in the years since its inception. (See also: <a href="">15 Surprising Facts About Taxes</a>)</p> <p>However, there are secrets that the IRS doesn't want everyone to know. These secrets may make your life a little easier and alleviate some of that anxiety that occurs every year around April 15.</p> <h2>1. People Who Earn Less Than $200K Probably Won't Get Audited</h2> <p>This is great for the average taxpayer. Most of us do not make more than $200,000 a year even with two-income households. Reports show that those making over that amount have a 3% chance of being audited while those making more than $1 million have a 6% chance. Those same reports show that those of us making <a style="text-decoration:none;" href="">less than $200,000 have a less than 1% chance</a>. So relax as you hit send on your return each year. You are probably going to be just fine.</p> <h2>2. The IRS Fails to Collect Billions of Taxes Owed Every Year</h2> <p>In recent years, the amount of <a href="">uncollected tax dollars reached $350 billion</a>! Whether you believe that this unclaimed money should be use for programs or to simply pay down our existing national debt, this is money that Americans are not paying as they should be. (This number is estimated to be low, however, as it depends on people to self-report to estimate what they owe.)</p> <h2>3. The IRS Is Not Really Interested in Seizing Property</h2> <p>If you have gotten behind in paying taxes and are dealing with a collection agent, you may find him or her threatening to seize your property and assets. However, <a href="">this isn't really their goal</a>, just a threat they like to make to get you into action.</p> <p>Bank accounts are easy to seize and the IRS will do it. However, taking your property and reselling it does not bring in much of a return for the hours and money spent. Your wages can also be garnished relatively easy, and that will be done if you ignore the requests to pay back money owed long enough.</p> <h2>4. Not Every IRS Agent Has a Background in Finance and Taxes</h2> <p>In fact, entry level workers who man the call centers, perform tax audits, and attempt to collect money usually have very little grasp on the tax law. They are trained to perform their jobs in a specific way and may not have the background knowledge required.</p> <p>In addition, it has been found that those you speak to at the IRS can, in fact, <a href="">give you the wrong answer</a> almost half the time. For questions about tax law, it is always best to seek the counsel of a trusted CPA or tax attorney.</p> <h2>5. Filing Electronically Saves You a Lot of Hassle</h2> <p>Many issues that arise are due to filing your returns with paper and the USPS. Checks get lost in the mail and delay refunds as well as returns. Numbers get transposed on the forms or addition fails to add up. Social security numbers get entered wrong. All of these things can cause a flag to pop up for a possible audit, delay a refund getting to you, or cause your return to be delayed.</p> <p><a href="">Filing electronically saves you the hassle</a> during the filing process, gets your refund to you quicker, and can give you a peace of mind after you've filed knowing your chances of that audit are reduced.</p> <h2>6. The IRS (or at Least Their Machines) Make Mistakes</h2> <p>Just because the IRS says you owe money, it isn't necessarily so. In fact, the best move you can make when getting an audit notice (especially one that can easily be proven wrong) is to move forward with getting it amended. I actually received a CP-2000 audit notice, claiming I failed to report over $50,000 in income, and it came attached with an $18,000 tax bill, plus fees. It turns out that they mistakenly counted a $600.00 1099-form from a client as a $60,000 1099-form. With the help of a few form letters found on my tax preparer's website and prompt communication, the audit was closed in my favor.</p> <p>Paying income taxes isn't the highlight of anyone's financial life, but for now, it's here to stay. By being informed and remembering that, even the IRS isn't perfect, you can possibly avoid having to pay more than you really owe.</p> <p><em>Do you know any IRS secrets you can reveal? Please share in comments!</em></p> <a href="" class="sharethis-link" title="6 Things the IRS Doesn&#039;t Want You to Know About Them" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Linsey Knerl</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes audits IRS taxes Wed, 18 Jun 2014 21:00:04 +0000 Linsey Knerl 1145123 at 6 Tax Moves You Need to Make Right Now <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-tax-moves-you-need-to-make-right-now" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="thinking" title="thinking" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>With tax day thankfully behind us for another year, the last thing you probably want to think about right now is&hellip; taxes! But this is the ideal time to plan ahead for a less &quot;taxing&quot; April 15th next year. Here are the best moves to make right now. (See also: <a href="">The 10 Worst Tax Moves You Can Make</a>)</p> <h2>1. Estimate Your Taxes</h2> <p>If you're like most taxpayers, you probably got <a href="">a refund</a> this year. That may have felt like a nice bonus, and it's okay if you treat it as forced savings that may not have happened otherwise. However, getting money back means you overpaid your taxes. And with the average refund weighing in at over $2,800, that's a hefty overpayment.</p> <p>While you have to pay your taxes, you <em>do not</em> have to overpay. To estimate what you'll really owe in federal taxes this year, grab a copy of the return you just filed and pencil in what your numbers are likely to look like this year. Or just visit the <a style="text-decoration:none;" href="">IRS Withholding Calculator</a>, and run some numbers that way.</p> <p>Next, look at how much federal tax currently is being withheld on your paychecks, multiply it by the number of checks you'll receive this year, and compare it to your estimates. If you're on a path to overpay again this year, contact your employer's HR department and ask to have less withheld from your paycheck. Or, if you're self-employed, lower your quarterly estimated payments accordingly.</p> <p>Now do the same thing with your state taxes, although your state probably doesn't have an online calculator. So, print a form from your state's Department of Revenue or Secretary of State's office website and run the numbers manually.</p> <h2>2. Increase Your Retirement Savings</h2> <p>If you got a big refund this year and plan to follow the advice we just discussed, put some or all of your new monthly surplus into a tax-advantaged retirement savings plan, such as a 401(k) or IRA. That'll strengthen your future financial security and may also reduce your tax bill.</p> <p>At more and more workplaces, employees have a choice between participating in a traditional 401(k) or a Roth 401(k) &mdash; or a traditional or Roth 403(b) if you work for a tax-exempt organization such as a school, charity, or government organization. The main difference between a traditional and a Roth retirement plan is how taxes are treated. With a traditional plan, every dollar you contribute reduces your taxable income. You get the tax break now, and then pay taxes on your contributions and earnings when you withdraw the money in retirement.</p> <p>With a Roth, your contributions do not reduce your taxable income, but when you withdraw money from the account in your later years you can do so tax-free.</p> <p>In general, the decision comes down to a comparison between your tax rate today and an educated guess about your tax rate when you retire. When you're in the early years of your career, chances are your salary isn't very high, so your tax rate isn't very high. You may be better off with a Roth. But if you're on the higher end of the earnings spectrum, you may be better off with a traditional 401(k). If that's you, increasing your contributions this year will lower your tax bill.</p> <p>In 2014, you are eligible to contribute $17,500. Those age 50 and older can contribute another $5,500.</p> <p>If you don't have access to a 401(k), the same advice applies to investing in a traditional or Roth individual retirement account (IRA), although the contribution limits are much lower &mdash; $5,500, and another $1,000 if you are 50 or older.</p> <h2>3. Save for Your Health Care</h2> <p>There are two primary ways to save on taxes when saving for health care costs.</p> <h3>Open a Health Savings Account</h3> <p>An increasingly popular way to pay for health care is to pair a high-deductible health insurance plan with a <a href="">health savings account</a> (HSA). The high deductible gets you a relatively low insurance premium. You then you cover the deductible and other out-of-pocket health care expenses by making tax-deductible contributions to an HSA. For individuals, a health insurance plan with a deductible of $1,250 qualifies you for an HSA. For families, the deductible must be at least $2,500. Individuals can then make tax-deductible contributions into an HSA of up $3,300; families can contribute $6,550. One great benefit of an HSA is the ability to roll over unused funds from one year to the next.</p> <h3>Participate in a Flexible Spending Account</h3> <p>If you don't qualify for a health savings account, your employer may offer a flexible spending account (FSA) for out-of-pocket health care costs. This one is a little trickier and not as advantageous as an HSA. Like an HSA, contributions into an FSA reduce your taxable income, but the maximum you can contribute is $2,500 per year, and your employer can only allow you to roll over $500 of unused funds from one year to the next. That means you have to be careful in estimating how much you may spend on health care costs for the coming year.</p> <h2>4. Buy a House</h2> <p>Of course, there are other considerations than taxes when buying a house (like making sure you can actually <em>afford</em> to <a href="">buy a house</a>!), but you may be surprised to find that owning doesn't cost much more, if at all, than renting. That's because you can deduct mortgage interest and property taxes. Print a copy of <a href=",-Itemized-Deductions">Schedule A from the IRS</a>, add up your qualifying itemized deductions, and see if it comes to more than your standard deduction ($6,100 for individuals, $12,200 for married couples filing jointly). If so, plug those numbers into the estimates you ran earlier in figuring this year's tax bill and see how home ownership may impact your cash flow.</p> <h2>5. Shore Up Your Emergency Fund</h2> <p>Paying taxes can be painful enough. Paying tax penalties is even worse. And yet, the IRS took in $5.7 billion in <em>penalties</em> from people who withdrew money from their IRA or 401(k) before age 59&frac12;. Some of the early withdrawals can be chalked up to lack of knowledge about better alternatives, such as rolling over your balance penalty- and tax-free into an IRA when leaving your employer. Some of it is due to a lack of other savings. To avoid treating retirement savings as an emergency fund, <a href="">build a real emergency fund</a> by stocking a savings account (online banks typically pay the best interest) with three to six months' worth of essential living expenses.</p> <h2>6. Save for College</h2> <p>Finally, if you have a college-bound child, saving through a 529 plan <em>may</em> reduce your taxes. Every state offers such a plan. While there are no federal income tax deductions available for contributions, some states offer state tax benefits to residents who use their state's plan. Of those, some allow you to take deduction, which lowers your taxable income. Even better, some provide a tax credit, which lowers your tax bill dollar for dollar. Find out what your state offers by searching on the name of your state and &quot;529 plan&quot; or visit <a href=""></a>.</p> <p><em>What steps have you taken to make the tax laws work in your favor?</em></p> <a href="" class="sharethis-link" title=" 6 Tax Moves You Need to Make Right Now" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Matt Bell</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Retirement Taxes retirement saving taxes Thu, 22 May 2014 08:12:26 +0000 Matt Bell 1140110 at Best Money Tips: Reduce Your Food Expenses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-reduce-your-food-expenses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="groceries" title="groceries" class="imagecache imagecache-250w" width="250" height="182" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="">Best Money Tips</a> Roundup! Today we found some great articles on reducing your food expenses, tax day freebies, and steps to investing in yourself.</p> <h2>Top 5 Articles</h2> <p><a href="">5 Ways to Reduce Your Food Expenses</a> &mdash; To reduce your food expenses, buy in bulk and limit junk food. [NarrowBridge Finance]</p> <p><a href="">It's Time to Relax and Enjoy These 18 Tax Day Freebies</a> &mdash; This tax day, take advantage of free document shredding at Office Depot. [PopSugar Smart Living]</p> <p><a href="">Seven Steps to Investing in Yourself</a> &mdash; Reviewing your career map and considering outsourcing are just a couple steps to investing in yourself. [Money Smart Life]</p> <p><a href="">5 Spring Home Maintenance Projects</a> &mdash; This spring, inspect your roof and clean your gutters. []</p> <p><a href="">Your Tax Refund: How You Should Use It and Why You Should Lose It</a> &mdash; Consider using your tax refund to pay off your debt or save for retirement. [Christian PF]</p> <h2>Other Essential Reading</h2> <p><a href="">How to Get Noticed - Job Hunting Secrets For Career Changers</a> &mdash; Career changers would be wise to network your way into hidden or unadvertised jobs. [Forbes]</p> <p><a href="">7 last-minute tax tips for procrastinators</a> &mdash; If you procrastinated on your taxes, get professional help if you need it. [Living on the Cheap]</p> <p><a href="">Do You See Your Retirement Contributions as a Loss? Getting Past Roadblocks to Investing</a> &mdash; Remedy the loss aversion you feel when you invest by having money contributed to your retirement account before you see it in your checking account. [Cash Money Life]</p> <p><a href="">The Wonders and Pitfalls of Working From Home</a> &mdash; Working from home can maximize your efficiency, but it can also increase distractions. [One Cent at a Time]</p> <p><a href="">Easter Decorations to Make With Your Kids</a> &mdash; You can make Easter egg centerpieces or a candy terrarium with your kids this Easter. [Parenting Squad]</p> <a href="" class="sharethis-link" title="Best Money Tips: Reduce Your Food Expenses" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Ashley Jacobs</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes best money tips groceries Tue, 15 Apr 2014 09:24:15 +0000 Ashley Jacobs 1135285 at Filing Your Taxes for Free Online: How to Do It and What to Expect <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/filing-your-taxes-for-free-online-how-to-do-it-and-what-to-expect" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="woman using laptop" title="woman using laptop" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p><em>Did you know you could file both your federal and state taxes for free if you earned $58,000 or less last year? MyFreeTaxes &mdash; offered through a national partnership between Goodwill Industries International, National Disability Institute, and United Way, and sponsored by the Walmart Foundation &mdash; provides free federal and state tax preparation and filing assistance, both online and in person, to individuals and families earning $58,000 or less a year. </em><a href=""><em></em></a><em> is the only online platform that can be used to file both federal and state taxes in all 50 states and the District of Columbia. The program has helped millions of individuals and families file for free and claim more than $8 billion in tax credits and refunds since 2009. If you filed an extension or missed the tax deadline, </em><a href=""><em></em></a><em> is available through October to help you file for free.</em></p> <p>Filing your taxes is easy. To take some of the mystery out of online filing, we've put together an overview on what people can expect when they prepare and file their own taxes through</p> <h2>Know That You Are Not Alone</h2> <p>If you have any questions, or need help along the way, call the MyFreeTaxes Helpline at 1-855-My-Tx-Help (1-855-698-9435) to speak with specialists that have been certified by the IRS.</p> <h2>Step 1: Be Prepared</h2> <p>Print off this&nbsp;<a href="">Tax Preparation Checklist</a>,&nbsp;which lists all of the documents you need to have when preparing your return. You will need the Social Security or Individual Taxpayer Identification Number (ITIN) for each family member. You'll also need your W-2s, 1099s, and other income forms that you should have received from your employer. If you have childcare expenses, make sure you have the provider name and address on hand as well.</p> <h2>Step 2: Get the Facts</h2> <p>When you visit <a href=""></a> you can use tools like the Earned Income Tax Credit (EITC) Calculator to see if you qualify for this valuable credit. Once you have your documents ready, click the yellow &quot;File Now&quot; button to begin the filing process.</p> <p><em>TIP: To make sure that you use the free MyFreeTaxes service instead of the paid H&amp;R Block&reg; service, start your return by clicking the yellow &quot;File Now&quot; button on the MyFreeTaxes website.</em></p> <p><em><img width="605" height="376" src="" alt="" /></em></p> <h2>Step 3: Create an Account</h2> <p>For the smoothest filing process and to ensure that you receive the free service, create a new account for this year even if you have used H&amp;R Block to file a return in the past. Remember, the free service is only available if your adjusted gross income (AGI) was $58,000 or less in 2013. On the sign in page click &quot;Create Account.&quot;</p> <p><em>TIP: Write down your login information in a safe place so that you can access your return if you need to later on.</em></p> <p><em><img width="605" height="379" src="" alt="" /></em></p> <h2>Step 4: Start Your Return</h2> <p>You're ready to start your return! First you'll enter basic information like your name and address. Then, you'll need to answer questions related to what may have changed in the last year (e.g. filing status, residency) so the filing software knows what appropriate forms to include.</p> <p><em>TIP: If you are filing jointly or will be adding family members or children to your return, make sure you have each individual's correct Social Security number or Tax Payer Identification number handy to save you time</em>.</p> <p><img width="605" height="436" src="" alt="" /></p> <h2>Step 5: Enter Information From Your 2013 Tax Papers in the Online Form</h2> <p>The software will ask you to input information from your W-2 and other tax forms. For many of them, you simply need to match the numbered boxes on the tax form with the corresponding boxes online.</p> <p><em>TIP: Keep all of your 2013 tax documents in a neat pile on one side of the computer. After you enter the information from a form, move it to the other side of the computer so that you can see which forms you haven't entered yet.</em></p> <p><em><img width="605" height="370" src="" alt="" /></em></p> <p><em><img width="605" height="464" src="" alt="" /></em></p> <h2>Step 6: Review Your Return</h2> <p>Prior to submitting your tax return you'll have the opportunity to review and claim applicable tax credits, as well as a final chance to review your entire tax return.</p> <p>Remember, if you have questions at any point when preparing and filing your taxes online through, please call our toll-free helpline at 1-855-My-Tx-Help or use the online chat.</p> <p><em>TIP: Make sure to check that all 2013 tax forms have been entered into the system, as some determine your eligibility for valuable tax credits and deductions.</em></p> <p><em><img width="605" height="454" src="" alt="" /></em></p> <h2>Step 7: Choose How to Receive Your Refund, and Then Submit Your Return</h2> <p>Taxpayers expecting a refund can choose to have their refund mailed to them or deposited directly into their bank account.</p> <p><em>TIP: The IRS recommends filers choose the direct deposit option so they get their money back quicker.</em></p> <p><em><img width="605" height="455" src="" alt="" /></em></p> <h2>Step 8: Pat Yourself on the Back; You Just Prepared and Filed Your Own Taxes!</h2> <h2>Step 9: Check the Status of Your Refund</h2> <p>If you are expecting a refund, check the <a href="">IRS website</a> to see where you stand.</p> <h2>Step 10: Make the Most of Your Tax Refund</h2> <p>Here are some <a href="">great ways to use your tax refund</a>.</p> <h2>Step 11: Tell Your Friends and Family That They Don't Have to Pay to File Their Taxes!</h2> <p>You're not the only one who wants to save money by doing their taxes online.&nbsp;</p> <p><span style="font-size: 13px; line-height: 1.7em;">Now that you know what to expect, visit </span><a style="font-size: 13px; line-height: 1.7em;"></a><span style="font-size: 13px; line-height: 1.7em;"> and </span><strong style="font-family: inherit; font-style: inherit; line-height: 1.7em;">file your taxes for FREE if you made $58,000 or less last year</strong><span style="font-size: 13px; line-height: 1.7em;">. It's safe, convenient, and easy.</span></p> <a href="" class="sharethis-link" title="Filing Your Taxes for Free Online: How to Do It and What to Expect" rel="nofollow">ShareThis</a><div class="field field-type-text field-field-guestpost-blurb"> <div class="field-label">Guest Post Blurb:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <p>&nbsp;This is a guest post from MyFreeTaxes.</p> </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">MyFreeTaxes</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes Fri, 11 Apr 2014 00:30:29 +0000 MyFreeTaxes 1135177 at Get a Bigger Refund With These Often-Overlooked Tax Deductions <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/get-a-bigger-refund-with-these-often-overlooked-tax-deductions" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="woman with papers" title="woman with papers" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Everyone knows that there are only two things certain in life: death and taxes. When tax time looms its ugly head, most utter a groan and diligently file their returns. One could argue that the tax code is a confounding minefield purposely written to confuse and frustrate. The following deductions are underused (and perfectly legal) ways to ensure you keep as many of your hard earned dollars as possible. (See also: <a href="">Stupid Tax Return Mistakes</a>)</p> <p>Before deducting to your heart's content, remember to document everything. Keep your receipts and other proof so you don't find yourself in a pickle if the tax man comes knocking on your door. There may be limitations on your ability to claim these deductions. Consult a certified public accountant if you have any questions, concerns, or if you are completely out of your element.</p> <h2>1. Gambling</h2> <p>Who doesn't like a little misappropriation of personal funds? When you find yourself a few too many cocktails deep and sitting at the blackjack table with your inhibitions lowered, it's easy to lose your hard earned cash. Don't worry, Mr. Tax Man feels your pain.</p> <p>Whether you lingered at the roulette table for too long or have a penchant for quick pick lottery tickets, you can ask Uncle Sam to take pity on your wallet and deduct your losses. If it sounds too good to be true, that's because <a href="">there is a catch</a>. If you're going to claim gambling losses, you must report your winnings as well.</p> <p>As an added twist, you can only claim losses to the extent of your winnings. So if you pay $100 on scratch offs but only recoup $50, you can only claim $50 in losses; the other $50 is the price of playing the game.</p> <h2>2. Student Loan Interest</h2> <p>Those of you who are all too familiar with the crippling debt incurred from pursuing higher education know that the interest rates on student loans can be especially unforgiving. Before you start lamenting the money that hasn't even gone toward paying your premiums, the IRS is here to help ease the pain. (See also: <a href="">What Recent Grads Must Know To Repay Federal Student Loans</a>)</p> <p>Folks who are legally obligated to pay back their student loans can deduct the interest that they have paid in doing so. Even if you are lucky enough to have parents that repay your loans, you can still claim the interest paid since you are the one liable for the debt. The IRS even has a <a href="">handy 10 minute quiz</a> you can take to see if you're eligible.</p> <h2>3. Charitable Expenses</h2> <p>Most people are aware that charitable contributions to qualified organizations are deductible on your taxes, but the IRS's definition of &quot;charitable&quot; is somewhat of an ambiguous grey area. While you can't deduct the time you volunteer to charity, you can claim <a href="">out-of-pocket expenses</a> you incur on your philanthropic adventures. Did you bake cookies for a school fundraiser? The ingredients are tax deductible. Did you attend a swanky charity ball? You can deduct the mileage it took to get there. (See also: <a href="">Surprising Charitable Tax Deductions</a>)</p> <p>There was even a woman who was able to deduct the cost of her babysitter because her work at a local charity made the sitter necessary, although this might be more trouble than it's worth since the IRS took her to court to justify the claim.</p> <h2>4. Gadgets and Technology</h2> <p>In a world where technology is king, keeping up with the latest gadgets can be mighty expensive. So it's a good thing that the government will step in to help offset some of the cost. If you use your phone or computer exclusively for business, you can claim 100% of the cost, including your monthly cell phone bill.</p> <p>If you use you use your smartphone to post pictures of your lunch to Instagram, don't fret. If your tech gizmo of choice acts as both your business and personal device, you can deduct the portion used for business from your taxable income.</p> <p>These tax breaks don't just include new PCs or the latest smartphone. Printers, Internet service, cable TV, and <a href="">more can be deducted</a>. Of course, you will be required to keep meticulous records if you are asked to substantiate your claims.</p> <h2>5. Searching for a Job</h2> <p>It makes sense that the IRS would want to help people find work; it's in their best interest to have you earning money so that you can pay the tax man. So it comes as no surprise that Uncle Sam is willing to give a little back when you find yourself neck deep in the dog-eat-dog world of job hunting. (See also: <a href="">Tax Deductions for Job Hunters</a>)</p> <p>You can claim transportation costs such as gas, tolls, and parking; you can even write off printing expenses for resumes and business cards. But before you go too crazy, knot that the government has its share of restrictions. Your job search costs are considered miscellaneous expenses. As such you have to itemize all of your deductions, and they have to be more than 2% of your annual gross income.</p> <p>Of course there are <a href="">other stipulations</a>, so make sure you do your homework.</p> <p><em>Do you know of any law-abiding taxation loopholes? Share your financial wizardry in the comments!</em></p> <a href="" class="sharethis-link" title="Get a Bigger Refund With These Often-Overlooked Tax Deductions" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Ryan Lynch</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes deductions tax refund taxes Wed, 02 Apr 2014 08:36:11 +0000 Ryan Lynch 1133959 at Best Money Tips: Useful Things to Do With Your Tax Refund <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-useful-things-to-do-with-your-tax-refund" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="coins" title="coins" class="imagecache imagecache-250w" width="250" height="156" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="">Best Money Tips</a> Roundup! Today we found some fantastic articles on useful things to do with your tax refund money, when renting makes more sense than buying, and reasons to use a cash-only spending plan.</p> <h2>Top 5 Articles</h2> <p><a href="">Ten Useful Things To Do With Your Tax Return Money</a> &mdash; Fixing up your home and bolstering your emergency fund are just a couple good ways to use your tax refund money. [The Simple Dollar]</p> <p><a href="">Five Situations Where Renting Makes More Sense Than Owning a Home</a> &mdash; It makes more sense to rent when owning would leave you broke. [Cash Money Life]</p> <p><a href="">10 Reasons to Use a Cash-Only Spending Plan</a> &mdash; Using a cash-only spending plan helps you better learn the value of a dollar. []</p> <p><a href="">Not a Travel Hacker? Vacation Where and When Your Dollar Goes Furthest</a> &mdash; Save money when traveling by opting to stay away from touristy things and be more like a local. [PT Money]</p> <p><a href="">3 Ways to Harmoniously Blend Your Side Business Alongside Your Full-Time Job</a> &mdash; Negotiating with your boss for office freedom can help you blend your side business and full-time job. [Careful Cents]</p> <h2>Other Essential Reading</h2> <p><a href="">16 Ways to Feel Like a Kid Again</a> &mdash; To feel like a kid again, make a mix CD or make s'mores. [PopSugar Smart Living]</p> <p><a href="">Want summer camp deals? Start looking now</a> &mdash; It is important to consider the type of camp experience you want for your child as well as what you can afford. [Living on the Cheap]</p> <p><a href="">2 Behavioral Biases That Are Making You Lose Money</a> &mdash; Familiarity may be negatively affecting your portfolio and causing you to lose money. [MoneyNing]</p> <p><a href="">Perfect Preschool Flower Crafts to Brighten Up Your Home This Spring</a> &mdash; Consider making a flower bouquet canvas with your kids to brighten up your home. [Parenting Squad]</p> <p><a href="">Create Your Own Personalized Privacy Policy</a> &mdash; Create your own personalized privacy policy can help protect yourself and your business. [American Debt Project]</p> <a href="" class="sharethis-link" title="Best Money Tips: Useful Things to Do With Your Tax Refund" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Ashley Jacobs</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes best money tips tax refund taxes Tue, 25 Mar 2014 10:00:18 +0000 Ashley Jacobs 1132789 at Turn Last Year's Taxes Into This Year's Financial Spring Cleaning <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/turn-last-years-taxes-into-this-years-financial-spring-cleaning" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="finances" title="finances" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>It's tax time again, the time of year when Americans sift through the pile of papers on or near (and sometimes in) their filing cabinets in search of those elusive tax documents. Where'd the W-2s go? What happened to the 1099 from the bank?</p> <p>It's also the time of year we promise to do a better job sorting and filing for next year's taxes. Make this year the year you keep that promise. Or take it a step further and make tax time an opportunity to look ahead, financially speaking, rather than only look back at last year. After all, you probably have a clearer picture of your current financial situation right after doing your taxes than at any other time.</p> <p>Let's start with the tax documents, and then let's look at what else we can tidy up.</p> <h2>Wrangle Your Tax Documents</h2> <p>All that stuff you spent the day tracking down? Keep it in one place for next year. Include a <a href="">checklist</a> so you can keep track of documents as you receive them &mdash; or to know what to go looking for if you haven't. Also include on your checklist some personal info: Names, Dates of Birth, Social Security numbers for you, your spouse or partner, and every dependent you claim. These details will be handy for all sorts of other purposes, too.</p> <h3>Make a Simple Two Folder System for the Key Documents</h3> <p>Make one folder for all of your income documents such as W-2s from employers, 1099s for contract work, for interest income, gambling winnings, income from investment sales, rental income, whatever. Refer to your checklist!</p> <p>Make a second folder for your income adjustments and credits. Mortgage interest is the big one here, but there are lots &mdash; IRA contributions, charitable contributions, education expenses. As you receive receipts and statements for these, just drop them in your folder. Next March or April you'll be ready to go, and probably feeling proud of your sensible filing.</p> <h3>Consider Digital Files</h3> <p>Lots of financial institutions give us the option to receive digital copies of our statements and tax documents &mdash; various 1099s for instance, or the 1098 for interest paid on student loan debt. It's cheaper for them, and it cuts down on paper waste. As you receive these, save them in specific folders on your computer (say, &quot;Income&quot; and &quot;Credits&quot;). They'll be waiting for you at tax time next year.</p> <p>Every year when I'm doing my taxes I have to run out to the garage to take a look at annual car registration fees paid for each of our two cars. This year I've taken snapshots of the renewal documents with my smartphone and uploaded them to Evernote. (I could have just added them to my &quot;Income Adjustments&quot; folder, too.) Next year I won't have to run out to the car. I've done the same with my property tax bills. You can do this for any paper receipts you receive and would like to keep for tax purposes.</p> <p><strong>Note:</strong> Many institutions will charge a fee to access older statements. Check with your bank or lender. If you need to keep copies of these records for your taxes or for retention, be sure to download them and store them safely (whether digitally or as print outs) &mdash; and don't forget to back them up.</p> <h3>Reconsider Your Withholding</h3> <p>Most personal finance gurus advise against too much income withholding. Despite that, on average, <a href="">Americans withhold an extra $3,000</a> in income tax every year &mdash; $250 a month. While it's nice to get a $3000 check every spring, it's not the smartest use of <em>your</em> money. It's not even the smartest way to get a $3000 &quot;bonus&quot; every year.</p> <p>With the details fresh in your mind after finishing your taxes, visit the <a href="">IRS' Withholding Calculator </a>and figure out how much you should be sending the government out of every paycheck to bring that refund closer to $500. When you ask HR to make the change, also ask that they redirect the same amount into a savings account. You won't notice much, if any, change on your paystub, but you will have a growing savings account &mdash; one that's earning interest.</p> <h2>Create a Basic File System</h2> <p>I've outlined a simple two-folder file system for your taxes above. If you don't already have a file system for the rest of your Important Documents, consider setting one up.</p> <p>In addition to my two tax folders, I keep several folders for my freelance work as a writer and editor (basically income and expense), and for the household I keep folders for:</p> <ul> <li>insurance policies (life, homeowner's, auto, earthquake, flood [beach living!])<br /> &nbsp;</li> <li>home maintenance receipts for repairs and supplies, as well as for major appliances<br /> &nbsp;</li> <li>bills paid<br /> &nbsp;</li> <li>bank and credit card statements (only recently went paperless)<br /> &nbsp;</li> <li>mortgage documents<br /> &nbsp;</li> <li>passports and Other Important Stuff like SS cards, birth certificates, diplomas, etc.</li> </ul> <h2>Start Budgeting</h2> <p>You have all the details on your income. And some of the details on your spending. Why not expend a little more effort <a href="">to create a budget</a>? Most banks now offer robust online tools for tracking spending on credit cards and to monitor income and spending made through checking, and savings accounts. That's a good start. You can take it a step further by using a service such as <a href="">Manilla</a> to consolidate and monitor all your bills and help you track your spending.</p> <h2>Evaluate Your Retirement Savings</h2> <p>Can you save more? Can you make a contribution now, before you file, and repay your savings or checking account with your refund? You'll get a break on your taxes, and you will have done something nice for your future self.</p> <p>Now is also a good time to rebalance your funding allocation between riskier stocks and safer bonds. Depending on the performance of your portfolio over the last year, gains (or losses) have changed the balance of your investment, most likely toward riskier stocks, which may or may not be in alignment with your investment goals and risk tolerance.</p> <h2>Evaluate Your Debt</h2> <p>If you're like most Americans, you're carrying at least a little credit card debt. Maybe a lot. Do you know how much interest you're paying? Do you have a plan for paying that balance off?</p> <p>Get a handle on those details and start figuring out how to get away from that debt. A good first step is to commit some of your refund to those balances.</p> <h2>Check Your Credit Report</h2> <p>Speaking of credit. You're entitled to one free look at your credit report from each of the three major credit bureaus every year. Don't visit one of those services that advertise on TV with the catchy jingles (they'll try to sell you some other services you may not need). Just go to the only <a href="">annual credit report website</a> authorized by <a href="">federal government</a> to provide consumers with reports from the leading bureaus. Find anything amiss? Learn how to correct <a href="">credit reporting errors</a>.</p> <p>For more tips on<em> </em>Financial Spring Cleaning, join me and our Senior Editor, Meg Favreau, as well as Kristen Chase of Cool Mom Picks and Marc Karasu of Manilla on <strong>Wednesday, March 26 at 3:30pm ET</strong> for a <a href="">Google+ Hangout</a>. The Hangout will answer questions about how to de-clutter and organize your financial life this spring. Whether you&rsquo;re trying to get your financial paperwork in order to prepare your taxes, or want to do some financial spring cleaning in order to simplify your life, the conversation will provide participants with helpful tips, tricks and digital tools to be more productive, get control of your money, and start spring on a fresh financial note.</p> <p><em> </em></p> <p><em><a href=";k2=289|10&amp;k3=logo&amp;k4=&amp;"><img src="" alt="" /></a></em></p> <p><em>This post is brought to you by Citi. Learn more about the tools Citi offers to help simplify your financial life at <a rel="nofollow" href=";k2=289%7C10&amp;k3=disclaimer&amp;k4=&amp;"></a>.&nbsp;</em></p> <p><em>This content is not provided or commissioned by Citi. Opinions expressed here are author&rsquo;s alone, not those of Citi, and have not been reviewed, approved or otherwise endorsed by Citi.</em></p> <p><img width="0" height="0" src=";k2=289|10&amp;k3=&amp;k4=&amp;img=true" alt="" /><img width="0" height="0" src=";add_c87583=1&amp;add_s289=1&amp;add_n101=1" alt="" /><img width="0" height="0" src=";mt_adid=115091&amp;v2=s289&amp;v3=n101&amp;s1=c87583" alt="" /></p> <p>&nbsp;</p> <p>&nbsp;</p> <a href="" class="sharethis-link" title="Turn Last Year&#039;s Taxes Into This Year&#039;s Financial Spring Cleaning" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Lars Peterson</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes federal taxes files filing taxes financial planning Tue, 18 Mar 2014 10:24:11 +0000 Lars Peterson 1131591 at Best Money Tips: Commonly Overlooked Tax Deductions <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-commonly-overlooked-tax-deductions" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="magnifying glass" title="magnifying glass" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Welcome to Wise Bread's <a href="">Best Money Tips</a> Roundup! Today we found some stellar articles on commonly overlooked tax deductions, where you can learn home improvement skills, and tips for escalating your productivity.</p> <h2>Top 5 Articles</h2> <p><a href="">10 Commonly Overlooked Tax Deductions for 2014</a> &mdash; Don't overlook the tax deductions of state sales tax and jury duty pay. [PT Money]</p> <p><a href="">Where Can I Learn Home Improvement Skills?</a> &mdash; You can learn home improvement skills at your local hardware store or via technology. [Lifehacker]</p> <p><a href="">10 Tools &amp; Tips For Escalating Your Productivity</a> &mdash; To increase your productivity, utilize your commute time and take breaks. [Dumb Little Man]</p> <p><a href="">This Finance Must-Do in 2014 Is Often Forgotten</a> &mdash; If you are renting your home or apartment in 2014, get renter's insurance! [MainStreet]</p> <p><a href="">The Essential Items in a Minimalist's Closet</a> &mdash; Every minimalist should have two or three pairs of jeans in their closet. [Frugal Portland]</p> <h2>Other Essential Reading</h2> <p><a href="">8 Tax Breaks You Should Take Advantage of Now Before They Expire</a> &mdash; Take advantage of tax credits for energy-efficient homes and appliances and tax credits for electric vehicles. [PopSugar Smart Living]</p> <p><a href="">40 Regrets You Don't Want to Have in 40 Years</a> &mdash; Make sure you don't have the regrets of ignoring your intuition or letting your health go. [Marc and Angel Hack Life]</p> <p><a href="">10 Simple Ways To Cure A Hangover Effectively</a> &mdash; Cure your hangover effectively by drinking coffee and eating honey on toast or crackers. [Stepcase Lifehack]</p> <p><a href="">5 Work from Home Habits That Kill Your Productivity</a> &mdash; Starting your day without a plan can kill your productivity if you work from home. [Time Management Ninja]</p> <p><a href="">Little Things Go a Long Way: 4 Tricks That Make Being a Mom Easier</a> &mdash; To make being a mom easier, don't be afraid to delegate. [Parenting Squad]</p> <a href="" class="sharethis-link" title="Best Money Tips: Commonly Overlooked Tax Deductions" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Ashley Jacobs</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes best money tips tax deductions Thu, 06 Mar 2014 11:00:26 +0000 Ashley Jacobs 1129456 at Stupid Tax Return Mistakes That Will Get You Audited <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/stupid-tax-return-mistakes-that-will-get-you-audited" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="stressed man" title="stressed man" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>It's tax season, and that means it's time to start tearing your hair out. Maybe you're worried about owing the IRS. Maybe you're worried about an audit. Maybe you're trying to balance one fear against another. Don't. It can lead to stupid mistakes that will get you audited, creating a whole other set of problems &mdash; and mounting anxiety. Here are the small and silly mistakes that make up a big chunk of why people get audited. (See also: <a href="">10 Red Flags That Trigger Audits</a>)</p> <h2>Entering the Wrong SSN</h2> <p>This is perhaps the king of stupid mistakes on your tax return: putting down the wrong Social Security Number. If you put down the wrong SSN, your income isn't going to match what it should and the IRS is going to notice. Sound like too stupid of a mistake to make? It's not. In fact, it's one of the most common mistakes out there, along with the next one.</p> <h2>Not Checking Your Math</h2> <p>This is becoming a decreasing problem now that so few people prepare their taxes by themselves and by hand. Still, even if you're using a tax preparing program, you're entering information by hand, such as adding up every deduction in a single category together. Always double check your math, just like your teachers told you to do. Ignoring this step can lead to a simple stupid mistake and an audit that can cost you a ton of time and money, as well as create a lot of stress.</p> <p>Another way to avoid this stupid mistake is to hire a tax preparer, but be careful...</p> <h2>Using a Dubious Preparer</h2> <p>If you have someone offering you big returns, that can be a red flag. The reason being, you're only entitled to so much of a return, regardless of who prepares your taxes. A genius tax preparer is just someone who knows all of the deductions that you're entitled to and can help you claim all of them. On the other hand, a tax preparer with a flimsy regard for the law might fudge the numbers or shunt money off into tax deductions you're not actually entitled to. Doing that isn't smart business, it's playing Russian roulette with your finances. (See also: <a href="">5 Things Tax Preparers Should Tell You</a>)</p> <h2>Bragging About Ill-Gotten Gains</h2> <p>Another big surprise: People often out themselves when it comes to cheating on their taxes. Even if you're not doing anything illegal, talking about your tax return to the wrong people can be a big mistake. In the first case, it's no one's business. More than that, however, the IRS gets thousands of reports from <a href="">confidential informants</a> who are rewarded with a handsome bounty for the funds recovered. Keep mum about your tax return and don't give anyone anything to use against you.</p> <h2>Deducting &quot;Creative&quot; Donations</h2> <p>Donating is great, but it's not great to be creative and fudge how much you donated throughout the course of the year. (See also: <a href="">Surprising Charitable Tax Deductions</a>)</p> <p>This is a good place to put it in no uncertain terms: Be as truthful on your tax return as possible. If we were going to boil some of these down to a single stupid mistake it would be &quot;lying to get a slightly larger return.&quot;</p> <h2>Guessing</h2> <p>Don't guess, especially not when it comes to investments, dividends, interest, and other unearned income. If you do, you're likely to get it wrong. If you <em>don't</em> guess, the only thing that might trigger an audit is the bad math that we talked about earlier and that's another factor that's totally within your control. Remember that this type of income is taxed differently, so it's effectively like filling out a whole other tax form &mdash; and the IRS wants you to get it right. (See also: <a href="">Tax Document Checklist</a>)</p> <h2>Claiming Hobbies as a Business</h2> <p>One of the biggest ways that a self-employed person gets audited is by only pretending to be self-employed. Generally, to consider a hobby a business, it needs to make money. While the IRS will tolerate some losses while you're getting started, they're not going to let you claim to be a tennis instructor when you're losing thousands of dollars doing it every year. Be honest about what is a hobby and what is a business to avoid getting an audit letter this year.</p> <p><em>Any stupid tax mistakes I've missed? Please enter them in comments so that the rest of us can audit them!</em></p> <a href="" class="sharethis-link" title="Stupid Tax Return Mistakes That Will Get You Audited" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Nicholas Pell</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes tax audits tax mistakes taxes Tue, 11 Feb 2014 10:24:46 +0000 Nicholas Pell 1124324 at Best Money Tips: Legal Sources of Non-Taxable Income <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-legal-sources-of-non-taxable-income" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="cash" title="cash" class="imagecache imagecache-250w" width="250" height="168" /></a> </div> </div> </div> <p>Welcome to Wise Bread&#39;s <a href="">Best Money Tips</a> Roundup! Today we found some awesome articles on legal sources of non-taxable income, the happiest jobs around, and how to score a deal without leaving a store&#39;s website.</p> <h2>Top 5 Articles</h2> <p><a href="">15 Surprisingly Legal Sources of Non-Taxable Income</a> &mdash; Gifts up to $13,000 and contributions to a health savings account are legal sources of non-taxable income. [The Wisdom Journal]</p> <p><a href="">15 of the Happiest Jobs Around</a> &mdash; Did you know realtors and marketing consultants have some of the happiest jobs around? [PopSugar Smart Living]</p> <p><a href="">5 Ways to Score a Deal Without Leaving a Store&#39;s Site</a> &mdash; Shopping a store&#39;s sale section can help you save without having to search the web for coupon codes. [Three Thrifty Guys]</p> <p><a href="">How I kept saving even during a job loss</a> &mdash; To save money even during a job loss, reevaluate your expenses. [Get Rich Slowly]</p> <p><a href="">Lack of sleep costing you a fortune?</a> &mdash; When you are sleep deprived, you shop more hastily and pay for convenience. [Five Cent Nickel]</p> <h2>Other Essential Reading</h2> <p><a href=";utm_medium=feed&amp;utm_campaign=Feed%3A+howtofinancemoney+%28LCF+on+Personal+Finance%29">9 Ways to be Financially Happier</a> &mdash; Having a budget and being grateful for what you have can make you financially happier. [LCF on Personal Finance]</p> <p><a href="">4 Financial Things to Talk About Before Marriage</a> &mdash; Before you get married, take the time to discuss paying your bills with your partner. [Smart On Money]</p> <p><a href=";utm_medium=rss&amp;utm_campaign=top-tax-deductions-for-rental-property-owners-kmercadante">Top 10 Tax Deductions for Rental Property Owners</a> &mdash; Rental property owners can deduct insurance and depreciation costs from their taxes. [Moolanomy]</p> <p><a href=";utm_medium=rss&amp;utm_campaign=basic-principles-for-growing-wealth">5 Basic Principles for Growing Wealth</a> &mdash; If you want to grow your wealth, take calculated risks. []</p> <p><a href="">9 Ways to Brush Up Your Child&#39;s Art Education</a> &mdash; To brush up your child&#39;s art education, plan a paint and pizza night. [Parenting Squad]</p> <a href="" class="sharethis-link" title="Best Money Tips: Legal Sources of Non-Taxable Income" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Ashley Jacobs</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes best money tips Non-Taxable Income taxes Fri, 07 Feb 2014 11:00:11 +0000 Ashley Jacobs 1124285 at Best Money Tips: Tax Audit Flags <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-tax-audit-flags" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="stress" title="stress" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Welcome to Wise Bread&#39;s <a href="">Best Money Tips</a> Roundup! Today we found some fantastic articles on tax audit flags, tips for lowering your heating bill, and tips for easing back into work after vacation.</p> <h2>Top 5 Articles</h2> <p><a href="">25 Tax Audit Flags</a> &mdash; Drastic income changes and off the charts itemized deductions can be tax audit red flags. [The Wisdom Journal]</p> <p><a href=";utm_medium=feed&amp;utm_campaign=Feed%3A+FireFinance-FinancialIndependenceRetireEarly+%28FIRE+Finance+-+Financial+Independence+Retire+Early%29">12 Tips to Lower Your Heating Bill</a> &mdash; To save money on your heating bill, clear your heating vents and winterize your windows. [FIRE Finance]</p> <p><a href="">6 Tips For Easing Back Into Work After Vacation</a> &mdash; When going back to work after vacation, make the transition easier by getting in earlier and making a to-do list. [PopSugar Smart Living]</p> <p><a href="">How to See Beyond the Obvious Financial Options</a> &mdash; If you want to see beyond the obvious financial options, practice creative thinking. [Christian PF]</p> <p><a href="">Increase Your Income by Starting a Home Business</a> &mdash; Want to start your own home business? Make sure you understand the paperwork and tax implications. [Canadian Finance Blog]</p> <h2>Other Essential Reading</h2> <p><a href="">Joint or separate bank accounts for couples - which is better?</a> &mdash; When couples have joint bank accounts, it encourages financial discussions and removes the hassle of splitting costs. [Bargain Babe]</p> <p><a href="">Money-Saving Tricks Anyone Can Use</a> &mdash; To save money on clothes, make sure to use an apron when cleaning. That way your clothes don&#39;t get trashed. [Financial Highway]</p> <p><a href="">Super Bowl Printables: 7 Free Sites</a> &mdash; If you are looking for Super Bowl printables, try Snap Creativity or Hostess With The Mostess. [InkJet Willy]</p> <p><a href="">6 Kid-Friendly Ways to Celebrate the Super Bowl (Without Watching the Big Game)</a> &mdash; Teaching your kids to play flag football is just one kid-friendly way to celebrate the Super Bowl. [Parenting Squad]</p> <p><a href="">My Kind of DIY: Easy Car Repairs</a> &mdash; Installing windshield wipers is a car repair you can easily do on your own. [Stapler Confessions]</p> <a href="" class="sharethis-link" title="Best Money Tips: Tax Audit Flags" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Ashley Jacobs</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes audit best money tips flags red flags tax taxes Thu, 30 Jan 2014 11:00:11 +0000 Ashley Jacobs 1121283 at One Simple Trick to Get the Best Tax Benefit From Your Retirement Portfolio <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/one-simple-trick-to-get-the-best-tax-benefit-from-your-retirement-portfolio" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="balance" title="balance" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>The most basic strategy for long-term investing is asset allocation. But keeping to an allocation means rebalancing your portfolio, and rebalancing is fraught with complications &mdash; one big one being the tax implications of the sales you need to make. A simple trick can help you deal with that issue, but first let&#39;s take a closer look at asset allocation and rebalancing. (See also: <a href="">The Best Asset Allocation for Your Portfolio</a>)</p> <h2>What Is Asset Allocation?</h2> <p>The idea of asset allocation is to spread your investments among various categories (stocks, bonds, cash, gold, real estate, etc.), with the percentages in each category chosen to balance your desire for return and willingness to take risk.</p> <p>There are a lot of rules of thumb for asset allocation.</p> <h3>Spreading Your Wealth Around</h3> <p>One simple one is to set the stock fraction of your portfolio equal to 100 minus your age &mdash; so a 24-year-old would go with a portfolio of 76% stocks with the rest in bonds. Each year the portfolio gets a little more conservative, gradually shifting to only 35% stocks by age 65.</p> <p>An asset allocation championed by financial writer Harry Browne was a simple 25% each divided among stocks, bonds, gold, and cash.</p> <p>Many financial writers and advisors have model asset allocations. There is, of course, no way to know what asset allocation will turn out to be the best (until the future arrives, and it turns out that an asset allocation of 100% in whatever went up the most would have been best).</p> <p>My own sense is that any reasonably well-diversified portfolio will be okay: Just pick one. Sticking to an asset allocation means that you automatically avoid the error of putting all your money into whatever last year&#39;s hot investment was. (See also: <a href="">How to Know if a Company Is Worth Your Investment</a>)</p> <h2>What Is Rebalancing?</h2> <p>Because investment prices are constantly changing, your portfolio will almost immediately be out of balance. If stocks have gone up, the percentage of your portfolio invested in stocks will be above the target level. Rebalancing is the process of getting each category of your portfolio back to its target percentage. (See also: <a href="">7 Online Investing Tools and Apps</a>)</p> <p>In theory, rebalancing is easy:</p> <ol> <li>Calculate your total assets.<br /> &nbsp;</li> <li>Apply your target percentages to figure out how much money you should have in each category.<br /> &nbsp;</li> <li>In any category that&#39;s over its allocation, sell enough to bring the category down to the target.<br /> &nbsp;</li> <li>Use the money from those sales to buy the appropriate amount in each category that was under it&#39;s percentage.</li> </ol> <p>In practice, rebalancing is trickier than that, for several reasons.</p> <h2>Rebalancing Complications</h2> <p>The first issue with rebalancing is deciding how often to do it. You could do it every day &mdash; or even every second &mdash; selling a little of anything that had gone up a penny and buying whatever had gone down a penny, but that much churning would just add complexity and expense to no particular benefit. The general consensus is that annual rebalancing is about right, but you could make the case that doing it monthly or quarterly would be better.</p> <p>The second issue with rebalancing is procrastination. There&#39;s just natural inertia &mdash; it&#39;s one more thing to do, but one that doesn&#39;t have a real deadline, so it gets put off until later. (See also: <a href="">10 Ways to Stop Procrastinating</a>)</p> <p>There&#39;s another factor, though, which is that after a year, your portfolio is probably pretty far off from its target percentages &mdash; but in what seems like a good way. You&#39;ll have more of your winners and less of your losers, and who doesn&#39;t want that? Selling your winners is always tough, and buying the laggards even tougher.</p> <p>Those are both real issues, but this post is about the third issue with rebalancing, which is taxes.</p> <h2>Tax-Efficiency in Rebalancing</h2> <p>Besides the issue of it just being tough to let your winners go, rebalancing also raises the issue of capital gains taxes. All those sales of winners incur tax liabilities. (Worse, since you&#39;re not selling the losers, you don&#39;t even have any losses to offset your gains.)</p> <h3>Rebalance Via Contributions Rather Than Sales</h3> <p>There&#39;s one basic trick to ameliorate this issue, which works pretty well: <em>Use your contributions to rebalance your portfolio.</em> Instead of dividing your contributions up the same as your target percentages, divide them up so as to move your portfolio closer toward balance.</p> <p>The calculations can get complicated if you let them &mdash; but you don&#39;t need to let them.</p> <p>If you make contributions frequently, and especially if a single contribution isn&#39;t big enough to bring your portfolio entirely back into balance, you can do it the easiest possible way: Figure out which category is the most dollars below its target, and put your whole contribution into that one category. Do the calculation afresh for the each contribution, and your portfolio will stay reasonably close to your desired asset allocation.</p> <p>The same thing can work when you leave the contribution phase of your life and move into the draw-down phase: Use your withdrawals to move your portfolio back into balance by selling from whatever category is the most dollars over its target.</p> <p>Rebalancing by targeting your contributions works very well, especially in the early phases of building your portfolio, when each month&#39;s contribution is large compared to the size of your total portfolio.</p> <p>After ten or twenty years, your portfolio (we very much hope) will be large compared to each month&#39;s contribution, and it will drift from your target asset allocation faster than targeting your contributions can bring it back in line. This is somewhat eased by the fact that you&#39;ll probably be able to make larger contributions as you progress along in your career, but eventually market volatility will almost certainly force you to going back to plan A: Sell things that have gone up and buy things that have gone down. But a careful application of rebalancing with your contributions will minimize the amount you have to sell &mdash; and thereby minimize the amount of capital gains taxes you incur. (<a href="">Clever use of tax-advantaged accounts</a>, like IRAs and 401(k)s, will also help.)</p> <p><em>Do you look after your retirement funds via asset allocation? What tricks do you use to keep everything in balance?</em></p> <a href="" class="sharethis-link" title="One Simple Trick to Get the Best Tax Benefit From Your Retirement Portfolio" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Philip Brewer</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Investment Taxes asset allocation investment rebalancing retirement Wed, 08 Jan 2014 10:37:23 +0000 Philip Brewer 1107269 at Best Money Tips: Tips for End of Year Tax Planning <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-tips-for-end-of-year-tax-planning" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="finances" title="finances" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Welcome to Wise Bread&#39;s <a href="">Best Money Tips</a> Roundup! Today we found some fantastic articles on tips for end-of-year tax planning, ways to reduce risk in 2014, and the basic principles for growing wealth.</p> <h2>Top 5 Articles</h2> <p><a href="">17 Tips for End of Year Tax Planning</a> &mdash; Before the year is over, remember to finalize your records and do an AMT analysis. [My Dollar Plan]</p> <p><a href="">Ways to Reduce Risk in 2014</a> &mdash; To reduce risk in 2014, save up for major repairs or purchases. [Three Thrifty Guys]</p> <p><a href=";utm_medium=rss&amp;utm_campaign=basic-principles-for-growing-wealth">5 Basic Principles for Growing Wealth</a> &mdash; If you want to grow your wealth, invest in yourself. []</p> <p><a href="">8 Job Market Myths and Truths</a> &mdash; You shouldn&#39;t rely on an employment agency to help you find a job because 93% of the available positions out there are not listed with employment agencies. [The Wisdom Journal]</p> <p><a href=";utm_medium=feed&amp;utm_campaign=Feed%3A+CoupleMoney+%28Couple+Money%29">Deciding on When is the Best Time to Sell Your House</a> &mdash; When considering when to sell your house, ask yourself why you want to sell your home. [Couple Money]</p> <h2>Other Essential Reading</h2> <p><a href="">68 Mostly Free Ways to Entertain Yourself at Home</a> &mdash; Keep yourself entertained at home cheaply by listening to a TED Talk. [PopSugar Smart Living]</p> <p><a href=";utm_medium=rss&amp;utm_campaign=how-big-should-an-emergency-fund-be">How Big Should an Emergency Fund Be?</a> &mdash; The typical rule of thumb is that you should have enough money saved up to last you 3-6 months. [Moolanomy]</p> <p><a href="">3 Ways an Auto Parts Store Can Save You Money on Car Repairs</a> &mdash; Did you know you can get a free battery check at an auto parts store? [MoneyNing]</p> <p><a href="">How sustainable are your financial habits?</a> &mdash; To determine how sustainable your financial habits are, consider whether or not you&#39;ve stabilized your housing costs. [Five Cent Nickel]</p> <p><a href="">Understanding the IPO Process</a> &mdash; The purpose of an IPO is to create liquidity for early investors and employees. [Get Rich Slowly]</p> <a href="" class="sharethis-link" title="Best Money Tips: Tips for End of Year Tax Planning" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Ashley Jacobs</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes 2013 best money tips planning tax taxes Fri, 27 Dec 2013 11:01:37 +0000 Ashley Jacobs 1102190 at The 10 Worst Tax Moves You Can Make <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-10-worst-tax-moves-you-can-make" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="woman sitting with documents" title="woman sitting with documents" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Before long, it will be 2014, and you&#39;ll have to think about filing your tax return. Don&#39;t freak out, you have some time. But it&#39;s important to make the right decisions to avoid paying more tax than you have to, and to plan correctly for the following tax year. Here are 10 bad tax moves that everyone should avoid. (See also: <a href="">5 Year-End Tax Planning Moves</a>)</p> <h2>1. Paying Your Taxes Late (Or Not at All)</h2> <p>The <a href=";-IRS-Offers-Tips-to-Taxpayers">IRS reports that between 20 and 25 percent of taxpayers</a> wait until the last two weeks to file their taxes. It may be common to cut it close, but you don&#39;t want to blow right through it. The Internal Revenue Service will nail you with a 5% failure-to-file penalty for any unpaid taxes each month until you file. You may be able to avoid some penalties by filing an extension, but <a href="">that extra time is only for filing a return</a>; it doesn&#39;t mean you get more time to pay taxes due. Your best bet is to get your paperwork together and file before the deadline. (See also: <a href="">Tax Document Checklist</a>)</p> <h2>2. Lying on Your Return</h2> <p>It may be tempting to avoid telling the IRS about some income, exaggerating things to claim deductions, or otherwise fudging things in order to avoid paying taxes. And it&#39;s true that the IRS only audits a very small percentage of returns. But if you do get nailed, you&#39;ll be forced to pay a penalty of 75% of the understatement, <a href="">according to the IRS</a>. Egregious cases will be referred to the criminal investigations division.</p> <h2>3. Making Mistakes on Your Return</h2> <p>No one likes doing their taxes, but if you rush through them and make an error, it could cost you. If you accidentally understate the amount you owe, you may end up facing a <a href="">20% penalty</a>. (And that&#39;s only if you can prove to the IRS that it was a mistake and not fraud.) Clerical errors like misspelling your name or entering the wrong social security number will delay your return.</p> <p>Hiring a professional to do your taxes will reduce the likelihood of mistakes. If you prefer to do your own taxes, use a program like <a href="">TurboTax</a>, which automatically checks for errors. (See also: <a href="">6 Places to Get Free Tax Advice</a>)</p> <h2>4. Withholding Too Much (or Too Little)</h2> <p>If you are employed, taxes will be taken out of your paycheck, but it&#39;s very important to make sure you&#39;re not taking out too much or too little. If your withholding is off base, you could be stuck owing a large sum or getting too much in a refund. (Yes, a big refund can be a bad thing. It means the government&#39;s been holding on to your money for no reason.)</p> <p>Your withholding is determined by the information you fill out on your W-4 form, which you probably filled out when you got hired. This includes information on your marital status and the number of dependents in your household. (Be sure to adjust your withholding if you have a child, get married, or if you are taking care of an elderly relative.) The <a href="">IRS has a calculator</a> to help you figure this out, but it&#39;s up to you to change the W-4 form itself.</p> <h2>5. Investing Without Thinking About Taxes</h2> <p>Taxes on dividends and capital gains will take away a big chunk of your return on investments. Rates vary, but high-income earners could give back as much as 23.8% of their capital gains to the IRS. For most people saving for retirement, it&#39;s wise to consider a plan that offers a way to avoid or reduce these taxes, or to otherwise reduce your liability. (See also: <a href="">How to Choose a Retirement Account</a>)</p> <p>If your employer offers a 401(k), any money you contribute is deducted from your taxable income. A Roth IRA works in reverse &mdash; your contributions are taxed immediately, but you pay no taxes when you cash out down the road. Many financial advisors suggest having both of these accounts, because it&#39;s not easy to predict what tax bracket you&#39;ll be in when you retire.</p> <p>Also take a look at 529 plans and Coverdell ESA accounts for similar tax advantages on college and other educational expenses.</p> <h2>6. Not Keeping Up With Tax News</h2> <p>It&#39;s understandable that the average person won&#39;t know all of the ins and outs of the tax code. But keeping up with changes in tax policy will help you prepare for negative changes and also help you take advantage of new programs. In many instances you may qualify for new tax credits or deductions that you didn&#39;t even know existed.</p> <p>In 2013, marginal <a href="">tax rates will be unchanged for most people</a>, but the payroll tax holiday ended, meaning a 6.2% withholding rate for people making up to $113,000. (Have you noticed less money in your take-home pay?)</p> <p>There were also some other changes affecting higher earners in 2013, and the new Affordable Care Act could have <a href="">major implications for many Americans and their taxes</a>. Don&#39;t get caught by surprise.</p> <h2>7. Renting When You Can Buy</h2> <p>We&#39;ll concede that the decision to purchase a home is a personal one, and not one you should rush into. But from a taxation standpoint, there is considerable savings to be had. Homeowners get to claim a mortgage interest deduction on their taxes, and often will qualify for other tax credits and programs.</p> <p>Your exact savings will depend on how much you earn, as well as your interest rate and the size of your loan. But let&#39;s assume you&#39;re a married couple with an income of $100,000 &nbsp;and home priced at about $210,000 (the current national median.) <a href="">According to,</a> you will save more than $3,000 on your taxes in the first year with a 30-year loan at the current average fixed rate.</p> <p>Homeowners do usually have to pay local property taxes, but those are deductible from your federal tax bill.</p> <p>If you&#39;re weighing the pros and cons of buying a home, it&#39;s helpful to take these savings into account.</p> <h2>8. Treating Your Refund Like It&#39;s a Bonus</h2> <p>Every year at tax time, we hear people chatting about how they&#39;ll spend their tax refund, as if it&#39;s a spring bonus check from Uncle Sam. This is terribly flawed thinking. If you get a refund, it means that the government has held on to your money for most of the year. (See the above entry on tax withholding.) Moreover, tax refunds are not easily predictable, so it&#39;s dangerous to assume you&#39;ll be getting a certain amount. The smartest move is to budget as if no refund is coming. It may even help to set aside some funds in case you owe the taxman.</p> <p>If you do get a refund, resist the urge to get a refund anticipation loan, which can take out hundreds of dollars in fees.</p> <h2>9. Not Giving to Charity</h2> <p>There are obvious benefits to giving away a portion of your money to causes and people you care about. It helps society and makes you feel good, but it can also help you lower your tax bill.</p> <p>When you give to a charity, that money can be deducted from your taxable income. And it&#39;s not just money that&#39;s deductible. You can deduct donated items like food or clothing, and you can even deduct any mileage on your car that you incur while performing charity work.</p> <p>When my family recently renovated our house, we found a charity that took our old windows and doors and repurposed them; we got a sizable tax deduction in the process. If you have an old car you want to unload, consider donating that to charity as well.</p> <p>To take advantage of these deductions, you&#39;ll need to keep good records what you give, and itemize those deductions on your tax return.</p> <h2>10. Keeping Poor Records</h2> <p>Records are crucial to everything from proving wages, properly valuing investments, and identifying business expenses.</p> <p>When you get wage statements from your employer, keep them handy. The same goes for any statements relating to your brokerage accounts and retirement plans. Numbers like your salary and retirement contributions aren&#39;t things you want to guess on, as they have a direct impact on how much tax you pay.</p> <p>It&#39;s also important to save previous years&#39; returns. The IRS advises you to save at least three years of returns, and <a href="">some people advise to never throw out a return, ever</a>.</p> <p>Also keep records of any investments or major things you buy. It&#39;s common for people to buy things like shares of stock or equipment and then claim capital losses or depreciation on their taxes. But to do this, you need to prove when you made the purchases.</p> <p><em>Any tax mistakes I&#39;ve missed? Please share them in comments!</em></p> <a href="" class="sharethis-link" title="The 10 Worst Tax Moves You Can Make" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Tim Lemke</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes tax mistakes taxes Tue, 19 Nov 2013 11:00:07 +0000 Tim Lemke 1096698 at Best Money Tips: The Best Tax Moves for Fall <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-money-tips-the-best-tax-moves-for-fall" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="couple using laptop" title="couple using laptop" class="imagecache imagecache-250w" width="250" height="156" /></a> </div> </div> </div> <p>Welcome to Wise Bread&#39;s <a href="">Best Money Tips</a> Roundup! Today we found some fantastic articles on the best tax moves for fall, and getting off the kid-gift treadmill, and handling a lifestyle downgrade.</p> <h2>Top 5 Articles</h2> <p><a href="">The Best Tax Moves for Fall</a> &mdash; This fall, bulk up your retirement contributions. It&#39;s one of the best things you can do for your taxes! [US News and World Report]</p> <p><a href="">14 ways to get off the kid-gift treadmill</a> &mdash; To get off the kid-gift treadmill, opt to build a hideaway with the child instead of giving him or her a gift. [Surviving and Thriving]</p> <p><a href="">How to Handle a Lifestyle Downgrade</a> &mdash; Are you dealing with a lifestyle downgrade? Live in the moment and find ways to cut back on things that don&#39;t matter to you too much. [Family Money Values]</p> <p><a href="">Hacking Hawaii</a> &mdash; Want to take a trip to Hawaii? Keep it affordable by eating like a local and enjoying free stuff. [Ask Liz Weston]</p> <p><a href="">Second-run movies: big screen, small price</a> &mdash; Not only does heading to the theater to check out a second-run movie save you money, you also get to avoid the crowds! [I Pick Up Pennies]</p> <h2>Other Essential Reading</h2> <p><a href="">How to Get Noticed by a Recruiter</a> &mdash; Get noticed by a recruiter by updating your resume frequently. [Cash Money Life]</p> <p><a href="">Why You Should Never Go Grocery Shopping Again</a> &mdash; Taking advantage of grocery delivery services will save you time (and consequently money since time is money) as well as prevents you from making impulse buys that cost you even more money. [Guide Financial]</p> <p><a href="">9 Depression-Era Frugal Habits You Need to Pick Up</a> &mdash; Pick up the Depression-era habit of reusing items and mending things to save money. [PopSugar Smart Living]</p> <p><a href="">Using Craigslist to Save Money on Patio Removal</a> &mdash; If you ever have stuff you want taken out of your home (such as patio pavers), chances are you can find someone on Craigslist who will come and take stuff away for free if you let them have it for free! [The Family CEO]</p> <p><a href="">12 Ways to Help Make Homeschooling Work</a> &mdash; To make homeschooling work, listen to your child and work together as a team. [Parenting Squad]</p> <a href="" class="sharethis-link" title="Best Money Tips: The Best Tax Moves for Fall" rel="nofollow">ShareThis</a><br /><div id="custom_wisebread_footer"><div id="rss_tagline">Written by <a href="">Ashley Jacobs</a> and published on <a href="">Wise Bread</a>. Read more <a href=""> articles from Wise Bread</a>.</div></div> Taxes best money tips fall taxes Wed, 09 Oct 2013 09:48:03 +0000 Ashley Jacobs 1001443 at