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Income Tax – Type Your Tax Return

Wofadmin — Sun, 26 Nov 2006 12:21:47 +0000

Don’t give the IRS any reason to believe you are unorganized or incompetent. Type your tax return, or use the computer generated forms that the IRS has for collecting your information. Make sure you present your return in the most professional manner. The other thing about making sure your tax return is not submitted in a hand-written form, means you won’t have your return questioned or gone over by the IRS, simply because they can’t read a few of the numbers.

Income Tax – If You Are A Gambler – Keep Track Of Losses

Wofadmin — Sat, 25 Nov 2006 10:01:24 +0000

This sounds ludicrous to some folks, but if you are a gambler with any kind of betting frequency, keep track of all your losses over the years. Actually keep good, clean records of all your gambling losses so you can use them as write-offs on the chance you win big one day. The IRS will tax you on your winning (if you tell them about your winnings) and they will tax your on any large sums of money with impunity. If you have some detailed documents showing your past gambling losses, you can use that as a large deduction against the taxes you owe.

Income Tax – Make Your IRA Contributions Early In The Year

Wofadmin — Fri, 24 Nov 2006 07:41:02 +0000

Jump the gun on your IRA contributions and do them as early in the year as possible. Avoid making your IRA contributions late in the year or by the deadline of April in the following year. You stand to accumulate allot more money because your savings are multiplying tax free sooner EVERY year. You will save more in tax deductions as well by making early contributions. Try to get organized and make the largest contributions possible, as early as possible.

Income Tax – Consider A Roth IRA

Wofadmin — Thu, 23 Nov 2006 05:20:40 +0000

A Roth IRA is actually provides a tax free shelter for your invested earnings, but you can’t get a yearly tax deduction when you invest in them. Over a long period of time however, a Roth IRA can give a bigger pot of cash for your later years. Using the same example in the last post, where you start saving $3000 a year at age 30 until you are 65 years old – with a current tax rate of 25% and an estimated rate of return at 9% and a $40,000 yearly salary your results would be as follows: Your Roth IRA could be worth $705,374 at retirement. An ordinary taxable savings account would be worth $419,281. Notice how the standard IRA saving account only saved a total of $314,000 when the Roth IRA results in $419,000.

Income Tax – Consider A Deductible IRA

Wofadmin — Wed, 22 Nov 2006 03:00:18 +0000

A deductible IRA is pretty well a no-brainer as you can save considerable money over time. All your IRA contributions are will result in a portion becoming 100% tax deductible (hope that makes sense….or should I say cents), and if you like most Americans, you will qualify for a deductible IRA. A good example would be as follows: Annual contribution = $3,000 – Current age = 30 – Years until retirement = 35 – Age of retirement = 65 – Expected rate of return = 9.00% – Current tax rate = 25.00% – Retirement tax rate = 15.00% – Adjusted gross income = $40,000. Your IRA balance at retirement would be worth approximately $705,374 before income taxes. With a retirement income tax rate of 15.00%, this amount is $599,568 after taxes. An ordinary taxable account, after taxes, would be worth $314,461 at retirement. Total contributions by retirement will be $105,000. So you can see the advantage of a deductible IRA. You should be setting one up before the age of 30, and I recommend contributing the maximum amount.

Income Tax – Consider A Nondeductible Some folks can’t qualify for

Wofadmin — Tue, 21 Nov 2006 00:39:56 +0000

You can save allot of money with a nondeductible IRA. Your dividends and interest are won’t be taxed until the day you begin withdrawals in your later years. One of these IRA investments will eventually grow into a serious cash cow over an extended amount of time. Keep in mind that you will not pay tax on any of the capital gains with nondeductible IRA. This is important to understand if you cannot qualify for a deductible IRA.

Income Tax – Adjust Your Paycheck Withholding Allowances

Wofadmin — Sun, 19 Nov 2006 22:19:34 +0000

If you find that you are receiving fairly large refunds from the IRS each year, you may be able to lower your paycheck withholding deductions as per the IRS taxable income guidelines. Why not put more money in your bank account each month as long as you are giving the IRS their tax as per the federal tax code. The calculations required to figure out your withholding allowances are very simple, so take a look at it. Just ask your manager, supervisor, or people services associate with your company to help you with this matter.

Income Tax – Learn To Prepare Your Own Income Tax Return

Wofadmin — Thu, 16 Nov 2006 15:18:27 +0000

I know some folks who frown whenever I suggest they prepare their own tax return, but it can be done easily if you just take a little time to look over the free IRS books and pamphlets. If you do decide to prepare your own tax return make sure you don’t do it at the last minute – that is when it’s a hellish pain in the backside. Try to gather the IRS pamphlets, and educational documents a month before your tax return is due, so you can look everything over in detail. If you take the time to do your personal tax return once, you’ll have the process down pat for the next year. Another advantage you have by preparing your taxes is knowledge. You will learn how all the exemptions, deductions, income, expenses, and pay-stubs all dance together on paper. You will find “creative” ways to capitalize on your tax return, and let’s face it – you will do a better job than a stranger because it’s YOUR money at stake.

Income Tax – Keep Good Care Of Your Tax Records And Documentation

Wofadmin — Wed, 15 Nov 2006 12:58:05 +0000

We have a big empty (and dry) Coca-Cola cooler that is empty save for all our tax documentation. We keep every receipt, slip of paper, cancelled checks, check stub, in the hopes we can write much of it off. This actually takes some practice and some stick-to-it-ivness. It’s so easy to lose a receipt or a piece of mail that holds some free money for you in it’s contents. My wife and I keep all our records, mail, bills, stubs, mutual fund certificates, retirement bond certificates, cancelled checks, transaction receipts, bank account statements, credit card statements, paid bill stubs, ATM transaction slips, restraint receipts, etc., etc. Even if we know that some of these documents cannot be used for a tax deduction, we still save everything to make sure. We can easily put the unused documents aside during the sorting.

Income Tax – Beware Of Overpaying Your Estimated Taxes

Wofadmin — Tue, 14 Nov 2006 10:37:43 +0000

Don’t overpay on your estimated tax payments. The sum of your salary or wages withholding and your estimated tax payment are suppose to add up to 90% of your tax liability for the present year – or the sum can be 100% of your tax liability for the past year – whatever is less. If for some reason you know your tax liability will be more in the current year than the last year, you only need to pay whatever your tax liability was in the previous year.