We are filing our own taxes. I have always filed in on taxact in the past, but my new husband has a preference for turbotax, so we are using that this year. We are almost done. Since we have a little side business, we had to use the upgraded version of the software to get the schedule C.
While I appreciate your well-meaning advice, you speak entirely too broadly and without enough experience. Why would an ARM loan have been disastrous for you? Rates have steadily fallen since 2005, and you would probably be paying around 2.5% interest right now without ever having refinanced. Your rate probably wouldn't have even adjusted until 2010, so you would have missed the worst parts of the market. Regulations are already strangling the mortgage industry, and the new "qualified" mortgage stands to cut thousands if not millions of borrowers out of the market. ARM loans and their counterparts are valuable tools that allow banks to advance capital to riskier borrowers who will most likely refinance within 5-7 years. Eliminating those tools, and enforcing strict repayment rules will leave many people in serious trouble. We see everyday people who are struggling to make mortgage payments for any variety of reasons, and who are stuck paying 4%, 5%, or even 7-8% interest rates because they aren't "qualified" to refinance because of new regulations. I spend my days processing approximately 40 disclosures per customer, then taking those customers phone calls because they didn't understand the disclosures in the first place. Demanding that the government make more rules will not benefit you in the long run. Demanding that the populace be educated, however, will help everyone. If you want the government to solve people's financial problems, demand that finance classes become standard high school fare. Students should not graduate into the real world until they can balance a check book and explain a balloon loan. But the knee-jerk reaction of "control the things I don't understand!" may serve to make you more comfortable, but it will hurt a lot of people who rely on those sorts of loans to stay in their homes.
I have read many articles that have a similar opinion. I do own a few index funds but they have not performed as well as my actively managed funds in the last few years. Your explanation is good except I thought it was a little biased. Everything comes with a cost. I evaluate those costs in a simple way, do I feel that the value I receive from my investment, outweighs the cost. When I compared my index funds to actively managed, it was easy to see why my actively managed did better recently. An index only owns those companies that are in that index. My managed fund may be most closely compared to say the S& however, depending on the operating rules of the fund they may be able to buy other investments that an index cannot. For example, one fund has the ability to put a small percentage of their assets into alternative investments. The fund I'm referring to has been my best performer, outperforming all of my index and other funds. My advisor told me when I purchased this fund that if it's benchmark goes up, this fund should go up by more. He also warned that if we have losses, this fund will probably lose more than its benchmark. I was okay with the additional risk and so far it has done exactly what it's supposed to. My belief is that most people should own a little of everything. I have one advisor who always explains fees and costs very clearly to me. In the last 20 years he has purchased for me all of the following: actively managed funds, index funds, stocks, bonds, CDs, ETFs, fixed and variable annuities, term life, whole life, REITs and he has even referred me to the person who sold me car and home insurance. I did enjoy reading some of the points you made, I just beleive that there's no one right answer for everybody. Thank you.
I filed my own takes this year for the first time and was amazed at how uncomplicated it actually was! I have gone to H&R Block locations for the past few years due to having multiple jobs, being in college, and many other forms to make my taxes seem a little too overwhelming to handle on my own. But this year I just used H&R Block's free online federal filing program and it really was easy. I skipped their option to file for state taxes at the end, however, as it was an additional cost of $29.99. I figured I'm already paying taxes, why pay to PAY my taxes? So I went to my state's direct filing website and it was also easier than I expected, just plug in the numbers. I will be doing this method from now on.
We have used Taxact for several years. We will again this year. Just waiting a bit more because we're uncertain if they've caught up with all of the changes in Tax Code this year...
I've always done my own taxes, but 2012 was a good but complicated year -- we got married, bought a house and both moved states. So we'll be having the pros do it this year.
Surprised you didn't mention shopping at places that don't typically sell major name brand goods such as Aldi, Save-A-Lot, and Trader Joe's. I switched in 2012 and my grocery bills went down almost 40% vs. 2011!
A penalty interest rate can be just about double the rate someone who doesn't miss payments has to pay. That's why I think it's so important to get that minimal emergency fund set up early: Keeping a few hundred dollars on hand is how people avoid missing payments, which is how they avoid getting socked with penalty rates.
Suppose you have a large amount of consumer debt—let's say $10,000. If you're paying a 24% penalty rate, you're paying $200 a month in interest. Let's also say that you can scrape together $500 in cash. What do you do?
If you use the $500 to pay down your balance, that saves you $10 a month.
On the other hand, if by keeping that $500 in your checking account as an emergency fund you can quit missing payments, and if no longer missing payments means you get moved off the penalty rate and only have to pay the regular rate of 13%, your monthly interest payments drop to just $108; that saves you $92 a month.
Now, your $500 is also earning a pittance in interest. If you can earn 0.8% on the money, you'll pick up 33 cents a month. But that's not why you hold the cash. You hold the cash because it lets you make all your payments on time, getting you off the penalty rate.
Of course you're right that getting out of debt comes next. (Or, maybe, next-but-one: If you can get a 50% or 100% match on your 401(k), it's probably worth fully funding that, even before you pay off your debt.)
#3 Its a great idea to benefit from credit card business's point programs indeed. Being in debt management/consolidation business I help every one of my clients pay their bills on time. It is an extremely hard task to accomplish. Statistically 58 million adults admit to not paying all of their bills on time, and nearly 15% of Americans have been late making a credit card payment. Many people find it a great opportunity to achieve points so they spend the money on the little things, but their cash "burns a hole in their pocket". In 2009 alone credit card companies brought in 20.5 billion in just penalty fees, not interest, just people not paying their bills on time.
David has a great idea and many should follow it if their budget and determination fits. This was a great article thanks a lot.
Heavens no, I am not filing my own taxes. Though we are far from wealthy, my husband and I have a CPA do our taxes because we have multiple income streams and I work from home as a freelance writer. Our tax accountant knows the current law and understands us and our situation well. His fee for preparing our tax return is deductible the following year so it's like we get the benefit of his knowledge at little or no cost, and we have confidence that our return is done correctly. We've never been audited but if we ever are, our tax accountant will be invaluable.
Filing taxes, but the father-in-law is a tax preparer, so he helps us out with our filing for a box of Marshmallow Peeps and a visit from the grandkids. It is a 90 mile drive, but worth it on so many levels! :)
This year, I used a tax service hoping I qualified for one of the college tuition credits. No good. Next year I'll do my own because it shouldn't be complicated.
For the first time ever, I am not. My wife was recently ordained and there is some different tax laws for clergy. Plus she's now considered self-employed, so this way I know if I'm deducting everything I'm able to. I kind of miss not doing it myself, but I did try turbo tax online just to make sure I had all the forms, and this self employment stuff plus being a member of the clergy is just too complicated.
We are filing our own taxes. I have always filed in on taxact in the past, but my new husband has a preference for turbotax, so we are using that this year. We are almost done. Since we have a little side business, we had to use the upgraded version of the software to get the schedule C.
While I appreciate your well-meaning advice, you speak entirely too broadly and without enough experience. Why would an ARM loan have been disastrous for you? Rates have steadily fallen since 2005, and you would probably be paying around 2.5% interest right now without ever having refinanced. Your rate probably wouldn't have even adjusted until 2010, so you would have missed the worst parts of the market. Regulations are already strangling the mortgage industry, and the new "qualified" mortgage stands to cut thousands if not millions of borrowers out of the market. ARM loans and their counterparts are valuable tools that allow banks to advance capital to riskier borrowers who will most likely refinance within 5-7 years. Eliminating those tools, and enforcing strict repayment rules will leave many people in serious trouble. We see everyday people who are struggling to make mortgage payments for any variety of reasons, and who are stuck paying 4%, 5%, or even 7-8% interest rates because they aren't "qualified" to refinance because of new regulations. I spend my days processing approximately 40 disclosures per customer, then taking those customers phone calls because they didn't understand the disclosures in the first place. Demanding that the government make more rules will not benefit you in the long run. Demanding that the populace be educated, however, will help everyone. If you want the government to solve people's financial problems, demand that finance classes become standard high school fare. Students should not graduate into the real world until they can balance a check book and explain a balloon loan. But the knee-jerk reaction of "control the things I don't understand!" may serve to make you more comfortable, but it will hurt a lot of people who rely on those sorts of loans to stay in their homes.
I have read many articles that have a similar opinion. I do own a few index funds but they have not performed as well as my actively managed funds in the last few years. Your explanation is good except I thought it was a little biased. Everything comes with a cost. I evaluate those costs in a simple way, do I feel that the value I receive from my investment, outweighs the cost. When I compared my index funds to actively managed, it was easy to see why my actively managed did better recently. An index only owns those companies that are in that index. My managed fund may be most closely compared to say the S& however, depending on the operating rules of the fund they may be able to buy other investments that an index cannot. For example, one fund has the ability to put a small percentage of their assets into alternative investments. The fund I'm referring to has been my best performer, outperforming all of my index and other funds. My advisor told me when I purchased this fund that if it's benchmark goes up, this fund should go up by more. He also warned that if we have losses, this fund will probably lose more than its benchmark. I was okay with the additional risk and so far it has done exactly what it's supposed to. My belief is that most people should own a little of everything. I have one advisor who always explains fees and costs very clearly to me. In the last 20 years he has purchased for me all of the following: actively managed funds, index funds, stocks, bonds, CDs, ETFs, fixed and variable annuities, term life, whole life, REITs and he has even referred me to the person who sold me car and home insurance. I did enjoy reading some of the points you made, I just beleive that there's no one right answer for everybody. Thank you.
I filed my own takes this year for the first time and was amazed at how uncomplicated it actually was! I have gone to H&R Block locations for the past few years due to having multiple jobs, being in college, and many other forms to make my taxes seem a little too overwhelming to handle on my own. But this year I just used H&R Block's free online federal filing program and it really was easy. I skipped their option to file for state taxes at the end, however, as it was an additional cost of $29.99. I figured I'm already paying taxes, why pay to PAY my taxes? So I went to my state's direct filing website and it was also easier than I expected, just plug in the numbers. I will be doing this method from now on.
We have used Taxact for several years. We will again this year. Just waiting a bit more because we're uncertain if they've caught up with all of the changes in Tax Code this year...
I've always done my own taxes, but 2012 was a good but complicated year -- we got married, bought a house and both moved states. So we'll be having the pros do it this year.
Surprised you didn't mention shopping at places that don't typically sell major name brand goods such as Aldi, Save-A-Lot, and Trader Joe's. I switched in 2012 and my grocery bills went down almost 40% vs. 2011!
I used HR Blocks military online program (free to us) to file. Because I used it last year it only took 20 minutes or so to update it.
A penalty interest rate can be just about double the rate someone who doesn't miss payments has to pay. That's why I think it's so important to get that minimal emergency fund set up early: Keeping a few hundred dollars on hand is how people avoid missing payments, which is how they avoid getting socked with penalty rates.
Suppose you have a large amount of consumer debt—let's say $10,000. If you're paying a 24% penalty rate, you're paying $200 a month in interest. Let's also say that you can scrape together $500 in cash. What do you do?
If you use the $500 to pay down your balance, that saves you $10 a month.
On the other hand, if by keeping that $500 in your checking account as an emergency fund you can quit missing payments, and if no longer missing payments means you get moved off the penalty rate and only have to pay the regular rate of 13%, your monthly interest payments drop to just $108; that saves you $92 a month.
Now, your $500 is also earning a pittance in interest. If you can earn 0.8% on the money, you'll pick up 33 cents a month. But that's not why you hold the cash. You hold the cash because it lets you make all your payments on time, getting you off the penalty rate.
Of course you're right that getting out of debt comes next. (Or, maybe, next-but-one: If you can get a 50% or 100% match on your 401(k), it's probably worth fully funding that, even before you pay off your debt.)
My taxes are fairly straight foreward, so I do them myself every year with H&R Block.
#3 Its a great idea to benefit from credit card business's point programs indeed. Being in debt management/consolidation business I help every one of my clients pay their bills on time. It is an extremely hard task to accomplish. Statistically 58 million adults admit to not paying all of their bills on time, and nearly 15% of Americans have been late making a credit card payment. Many people find it a great opportunity to achieve points so they spend the money on the little things, but their cash "burns a hole in their pocket". In 2009 alone credit card companies brought in 20.5 billion in just penalty fees, not interest, just people not paying their bills on time.
David has a great idea and many should follow it if their budget and determination fits. This was a great article thanks a lot.
Yes! Always file our own taxes!
Noooooo....my fiance is a CPA, so I let him handle all of the tax stuff! As long as I make dinner, I can get my taxes done. It's a win/win!
I didn't file returns on my own this year....
I still haven't decided. Is that bad? :)
I have always prepared my taxes myself and did so again this year. I'll be receiving my refund tomorrow!
I filed my own this year. I used TaxSlayer website.
Heavens no, I am not filing my own taxes. Though we are far from wealthy, my husband and I have a CPA do our taxes because we have multiple income streams and I work from home as a freelance writer. Our tax accountant knows the current law and understands us and our situation well. His fee for preparing our tax return is deductible the following year so it's like we get the benefit of his knowledge at little or no cost, and we have confidence that our return is done correctly. We've never been audited but if we ever are, our tax accountant will be invaluable.
Filing taxes, but the father-in-law is a tax preparer, so he helps us out with our filing for a box of Marshmallow Peeps and a visit from the grandkids. It is a 90 mile drive, but worth it on so many levels! :)
I have always prepared my taxes myself and did so again this year. I'll be receiving my refund tomorrow!
Filed my taxes on January 31 (first day possible) through TurboTax. I've been preparing my own taxes for as long as I have filed.
I'm doing them myself but asking my CPA friend to look them over.
we are filing our own taxes.
This year, I used a tax service hoping I qualified for one of the college tuition credits. No good. Next year I'll do my own because it shouldn't be complicated.
For the first time ever, I am not. My wife was recently ordained and there is some different tax laws for clergy. Plus she's now considered self-employed, so this way I know if I'm deducting everything I'm able to. I kind of miss not doing it myself, but I did try turbo tax online just to make sure I had all the forms, and this self employment stuff plus being a member of the clergy is just too complicated.