If you are Self-employed are you withholding your taxes?

So you are self-employed, and, your income is not being reported to the IRS on a W2 but on a 1099-MISC form, which means that neither federal income tax or self-employment taxes are being withheld from your checks, and it also means that you are responsible for getting those funds over to the IRS on a regular basis, quarterly in fact.  Basically, you are required to pay

When is a loan not quite a loan?

So you took a loan from your 401K, because after all, if you were going to pay interest, you wanted to pay it to yourself, and there is some validity in that.  However, you hadn't bargained on losing your job before you repaid the loan.   You borrowed $20,000, repaid $5,000 and had an outstanding loan of $15,000.   If you get terminated with a 401K loan outstanding, you are required to pay the entire remainder in a very short time period, back to your company.  If  you are unable to do so,  then the loan morphs into a taxable distribution.  Now that $15,000 is added to your income and you will

Can your College Freshman manage a credit card?

Some questions that need to be answered to decide whether your student will be able to manage a credit card are:

Are they accustomed to paying bills on a regular basis? Will they be able to maintain a bill paying routine when they are under the stress of exams, or sorority/fraternity rush?

If not, late fees will probably accrue and interest rates could be increased. If they do not have a bill paying routine or if they are disorganized, the stressors of college life could cause them to

Where did 2% of Your Income go?

So I keep seeing articles and reports on how the payroll tax has been hiked by 2%, and I wonder why it is being reported as such, because it isn't a tax hike, it is a return to the rate that we had before.   The rate for payroll taxes has been 6.2 % for many years, since 1990.  The decrease to 4.2% was a temporary measure for 2011 and 2012.   The administration in an effort to increase workers take home pay, during a weak economy, reduced the payroll tax by 2%, so instead of those funds going towards social security which is where they normally go, they came home with you. 

Recently Married? Here are some Tax Tips

 

So you got married this year, and you are probably wondering how will your taxes be affected, or what steps you may need to take to be ready for tax season.   Here are a few tips:

1. Make sure that the Social Security Administration (SSA) has your new name.  The name and social security number recorded with the SSA must match your tax return. If you need to apply for a new card, call 800-772-1213 or apply here.  This short video gives you some more information.

Quoted 0911

"Americans are in a cycle of fear which leads to people not wanting to spend and not wanting to make investments, and that leads to more fear. We'll break out of it. It takes time."   Warren Buffet.

Spend responsibly.  Support a producer.  Help the economy avoid further contraction.

 

 

 

Year End Tax Saving Tips for Tax Year 2011

So folks, we are down to the wire, we are 2 weeks from the end of the year, and maybe saving on your income taxes is not foremost on your mind, there are probably thoughts of family, holiday dinners, gift giving - as it should be, but you may also want to devote some time to make sure that you have taken steps to reduce your tax liability as much as you can, of course, legally.  As a reader of this personal finance blog over the years, you are familiar with the year-end reminders to do all you can to legally reduce your tax liability.   This year I am going to point you to a number of columns with that information. 

Sandra Block in a USA Today column talks about - weatherization, college tuition credits, deferring income, accelerating deductions, charitable contributions and taking advantage of sales tax particularly if you are in a state with no state income tax.

To see which consumer energy efficiency credits apply for the tax year 2011, click here.

Here is an article on CBS Money Watch which talks about the mortgage insurance deduction, enhanced adoption credits, educator expenses adjustment, plus 9 other tax tips.

"The TaxLady" blog has some tax tips on vehicles here.

Bill Lynott, freelance writer, gives some additional advice on saving on your taxes here and there is also a link to Part 1 of his post.

The Small Business Administration (SBA) has these tax saving tips for small businesses, and YAHOO Finance also has these small business tips.

If you are a small business owner and thinking of starting a 401K for your business, Stuart Robertson in a Forbes article has some ideas here. 

Rande Spiegelman, Vice President of Financial Planning, Schwab Center for Financial Research has a host of tips that could apply to you here, from double checking your income records,  tax-preferred education savings programs, to ways to gift without incurring the gift tax.

I quote directly from Rande here, because it is also my belief and practice, " After you decide what to do this year, resolve to make financial planning a year-round exercise going forward (you've probably got better things to do around the holidays). That way, it'll be easier to check your progress, update your plan and, if necessary, take action long before the ball falls in Times Square on New Year's Eve."

And remember as you locate your documentation to support your tax deductions, start cleaning out and archiving your 2011 information and set up your folders for 2012 - this way you will start the year off right, yep, I know, you say you will every year, this year you are actually going to do it, yeah!!!  

Season's Greetings and a Prosperous New Year to everyone.