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This is a post by BargainBabe.com writer Yazmin Cruz.
I know the last thing you want to think about during the holiday season is taxes. Alas, as the saying goes in this world nothing is certain but death and taxes – that’s why it’s prudent to start preparing now. I’ve compiled a list of things you need to do to save money on your taxes next year.
Feed your 401k – If you have an employer-based retirement plan make sure to max out your contributions especially if the company is
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- How much money do I need to retire?
- How do I manage my retirement savings?
- How do I plan for taxes in retirement?
On the first page, Mike admits that there are plenty of good retirement books out there. So why did he write another one?
Can I Retire?
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Reader Mimi is looking for an “old fashioned CPA” for tax help – and she is willing to pay. Mimi writes:
I am searching for an old fashioned CPA who takes the time to review all deductions, make suggestions, etc. I am fed up with CPA’s who give me short shrift because I am not in business or a huge money making client.
Where can retired seniors go to find a service oriented CPA? I’m not looking for a freebie. I can pay a reasonable hourly fee for personalized service. Please advise if you can point me in the right direction.
thanks,
mimi
AARP is a good resource for seniors looking for tax help, but unfortunately the org’s free tax services run between January and April. Still, contact AARP (member@aarp.org or 888-687-2277) and ask them to point you in the right direction. You might also call your local senior citizens community center for recommendations.
What would you tell Mimi?
Got a question or tip? Shoot me an email.
Ace negotiator Jim Camp says start with no. Credit: falardeau/Flickr
If you end up fighting the IRS over your 2010 tax returns, a skipped return from last year, or another reason why you can’t pay your tax bill in full, it is possible to negotiate a pay as you can plan. Get the best deal possible with these seven tips which I summarized from Jim Camp of Camp Negotiation Systems. His website is Start With No.
1. Do your homework. Instead of reinventing the wheel, gather information from others who have gone through what you are about to. Look for strategies, precedents and tips online, (including the IRS website). Know your rights and your obligations. Take details notes.
2. Schedule face time. When you call the IRS, don’t talk to whoever picks up. Make an appointment to meet with an agent face to face nearby. Don’t answer questions over the phone. Talking in person gives you
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Faced with a tax bill, many of us want to pay less. Credit: Gamma Man/Flickr
Have you finished your taxes yet? They are due Apr. 18, 2011 this year. Avoid paying taxes, or reduce how much you owe, with these last minute tax tips that I summarized from Grant Thornton LLP, a firm headquartered in Chicago.
1. Boost your IRA. Get a deduction on your 2010 return even if you contribute to an Individual Retirement Account in 2011 – as late as Apr. 18, 2011. There is still time to open an IRA if you don’t have one. Contribution limits for 2010 are $5,000 or $6,000 if you are 50 and older.
2. Consider a Roth IRA. If you are not eligible to make a deductible IRA contribution, you may still be eligible to contribute to a Roth IRA. Adjusted gross income limits applicable to Roth IRAs can be significantly higher, particularly where both spouses work and are covered by other qualified retirement plans. A contribution to a Roth IRA will not get you a current tax deduction, but any future earnings will be exempt from tax.
3. Set up and (more…)
Vik-Thor/Flickr
Taxes are due Monday Apr. 18, 2011. These tips for how to deduct moving expenses on your 2010 taxes are summarized from the American Moving & Storage Association.
You can deduct reasonable moving expenses on your 2010 taxes if:
- you moved because of a change in your job or business location
- because you started a new job or business
- your new job is at least 50 miles farther from your old home than your old job was from your old home (If you had no previous job, your new job must be at least 50 miles from your old home) (more…)
A relic of taxes paid past. Credit: kevindooley/Flickr
I know this isn’t what you want to hear, but the clock is ticking on tax returns. I hear it very loudly! To help you get started on your taxes, here are the cheapest and most expensive ways to file. Prices include the cost of filing your federal and state returns.
- How we file: The vast majority of filers – 62% – do their taxes themselves using software, according to a poll of 2,200 people conducted by GetRichSlowly.org and MoneyRates.com showed. Just 23% were going to pay someone else to prepare the tax return, and a whopping 10% will file returns by hand. A lucky 5% will lean on a friend or family member to do their taxes.
- Buying tax software? Get an extra tax discount when you purchase the software through Ebates. Current cash back rebates are 15% back on H&R Block, 10% back on Turbo Tax, and $10-$37.50 on Intuit QuickBooks.
- Most expensive tax online filing: According to Get Rich Slowly, the pricey prize goes to ExpressTaxRefund, which costs approximately $70 .
- Cheapest tax online filing: GRS found the least expensive option is TaxHawk, which costs a big fat $0.
- Most expensive tax software: Turbo Tax (Intuit), which charges approximately $90 to file.
- Cheapest tax software: Tax Act is just $23.
- You need help! Hiring someone to do your taxes may cost hundreds of dollars.
- File for free! I found five ways to file your taxes for free.
Stop! Medical expenses can lower your taxes. Credit: TruthOut.org/Flickr
Keith Mendonsa, a tax expert from eHealthInsurance.com, shared the following four ways to reduce your taxes with health-related expenses. Consult an accountant or certified tax professional for more information about how these four tax deductions apply to you.
- Health tax deductions: A new deduction this year and only this year let’s self-employed persons deduct the cost of their health insurance premiums from their self-employment taxes on Schedule SE.
- Got self-employment income? “You may also be able to deduct health insurance premiums you paid for yourself and your dependents as an ‘above the line’ business expense (that is, without itemizing) on your federal tax return,” Mendonsa said in an email. You cannot deduct premiums paid during (more…)
Here are five ways to file for free. Get tax forms here or visit your local post office. The deadline to file taxes this year is Apr. 18, 2011.
1. IRS Free File. If you make less than $58,000, you are eligible to file your federal taxes for free using the IRS Free File program. Some 100 million Americans are eligible to use IRS Free File. The program walks you through the entire process and does the math for you. You can get a refund in as little as 10 days if you opt for direct deposit. This service is also available in Spanish.
To file your taxes for free click on the above link, then click on “Free File” on the right under Filing and Payments. Choose one of the Free File Alliance members that comes up that meets your tax needs. Once you pick a company you’ll be transferred to the company’s website to work on and file your taxes. If you do not have Internet access at home, there are many locations across the country where you can use the Free File software.
2. Free Fillable Forms. There are no income limits when you (more…)
blmurch / Flickr
This is a post by BargainBabe.com writer Yazmin Cruz.
Tax season is upon us and if you are contemplating doing your taxes to save money, think again. Doing your own taxes may not save you money, especially if you don’t know the difference between a tax credit and a tax deduction. Here’s how to find out if you should be doing you taxes or paying someone else to do them for you.
Consider this: If the time and money you spend doing your taxes costs more than hiring a professional, then (more…)
Start early, and your IRA will grow into a mature account. Credit: Rev Stan/Flickr
I want to give my little brother his very own IRA retirement account as a college graduation present. Just what every new grad needs!
He just started a new job and is working on creating a budget that fits his $513 a week salary. One of his main goals is to get his car on the road, but I’m gently trying to persuade him to buy a monthly bus pass and contribute to an IRA retirement account. This may well be his quickest way to become a millionaire. (In case you wondered, he said my post about his new budget was “legit.”)
I waited far too long to establish an IRA (mid-20s) and regret I did not begin contributing as early as possible. In fact, I don’t know of any age (more…)
A college student can be worth $2,500 under the American Opportunity Credit.
Last week I wrote about three educational and energy credits that reduce your taxes. I mentioned one deduction, too. So what’s the difference between a tax credit and a tax deduction?
A tax credit directly reduces the taxes you owe. So if you do your taxes and owe Uncle Sam $5,000, a $2,500 tax credit means you pay just $2,500 in taxes.
A tax deduction reduces your taxable income, which is what determines how much tax you pay. So if your gross income was $45,000, a $2,000 tax deduction means you pay taxes on $43,000.
In short, a tax credit saves you a lot more money than a tax deduction, so never skip a chance to claim a valid tax credit. Got questions? Leave a comment and I’ll do my best to answer.
More than 75 percent of all taxpayers get a refund, according to Turbo Tax, which says refunds averaged $3,000 last year. Three-fourths – could that be true? If it is, what are you going to spend your refund on?
If you’re still filling, here are three tax credits and one deduction to watch out for (in a good way). I summarized these tax tips from H&R Block.
- Energy credits. If you made an energy-efficient improvement to your home in 2010, you might be eligible to claim the non-business energy property tax credit. It is for (more…)
By Bobbi Burger Brunoehler of Bobbisbargains.
donation receipts
It’s tax preparation time; the time of year when you get rewarded for all of your efforts of having a yard sale and then donating the leftover items to charity. You diligently got your donation receipt and filed it away with a detailed list of what you donated. Good job!
Now you have one very important last step. You need to determine how much you can deduct on your taxes for everything you donated. IRS Publication 526 “Charitable Contributions” explains how to claim a deduction for charitable contributions. And IRS Publication 561 “Determining the value of donated property” says you may deduct the Fair Market Value of the item.
Fair Market Value (FMV) is defined as “the price that property would sell for on the open market.” So, how do you determine the price someone would pay for the sweater your Aunt Martha gave you for Christmas five years ago? Fortunately, there are several sites that will help you on this pricing journey. (more…)
SnapTax from TurboTax
There is a new way to file your federal and state taxes that claims to be easy and cheap. Whip out your iPhone or Droid to download TurboTax’s SnapTax and then file your taxes from the palm of your hand. The app is free to download but costs $15 when you file. The $15 covers both your state and federal 1040-EZ return.
The way it works is that SnapTax takes a picture of your completed W-2 (yes, you still have to fill it out), asks a few questions about your status, checks your math, then presents you with a “File Now” button. Tap it to file your tax returns electronically.
This works great for folks who have very, very simple returns. The price tag – $15 for both returns – is not bad, though if you make less than $58,000 you can file your taxes for free on a computer. You can also mail in your returns for free. Just remember to make a copy for your files!
My returns are too complicated to use SnapTax, but would you take advantage of something like this?
