Do you "envelope" budget? Credit: PinkMoose/Flickr
A friend emailed me with a bit of budgeting advice passed on from her mother, the professional organizer Janet Fishman:
Set up separate bank accounts for: living expenses, play, long-term savings, education, charity, and retirement and have either a percentage or fixed dollar amount from each paycheck go into these accounts. Most all companies that offer automatic deposits for payroll have the ability to automatically deposit into multiple accounts. Figure out how much you need to pay taxes, divide by the number of weeks you work, and that constitutes the dollar amount to set aside for each week. Repeat this for the categories above and you will be fully prepared and organized year round!
This ads up to six accounts – or more if you set up one for taxes and other categories. Phew! That strikes me as a lot to manage. Plus, you would have a harder time hitting minimum balance requirements to keep your account free or low cost.
On the other hand, how much money you have to spend on any given thing would be crystal clear. No pushing money earmarked for one expense to cover something else. Plus, retirement is singled out, which makes it more likely that you will save for retirement.
What do you think of this modern take on the “envelope” system? Would you use it?
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This is a post by BargainBabe.com writer Yazmin Cruz.
This year’s tax deadline, April 17, is looming. Have you done your taxes, yet? If you’re opting to hire a tax professional to complete your taxes, I share 8 tips for finding a reliable tax preparer.
- Check the preparer’s history. You can check with the Better Business Bureau to see the ratings and complaint record on the preparer.
pt101 / Flickr
I share five must read blog posts about saving money every Friday.
Pay Yourself First – Putting yourself first is a must when it comes time to save money. Here’s how to do it. (Wisebread)
Student loans – Can’t pay your student loans? Find out what happens if you default on federal student loans and get tips to avoid it. (Money Crashers)
Coupons for snobs - The expansion of Groupon Reserve continues. Don’t know what it is? It’s the company’s luxury offerings. (Time Moneyland)
Tax audits – Here are 11 red flags you’re going get a tax audit. Plus, tips to avoid them. (CNN Money)
Student discounts – Check out this long list of student discounts. You’ll find some major savings! (Main Street)
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401k / Flickr
This is a post by BargainBabe.com writer Yazmin Cruz.
Getting assistance with your taxes does not have to cost you a dime. If you made less than $50,000 last year, check out the Volunteer Income Tax Assistance (VITA) Program.
The program is sponsored by the IRS and it’s run by IRS-certified volunteers who go through tax training to prepare and file your taxes. Many volunteers also receive training that allows them to help filers in their specific states.
I Believe I Can Fry / Flickr
I share five must read blog posts about saving money every Friday.
Double duty items – Check out this list of 21 reusable disposable products. (Wisebread)
Home improvement – Thirteen simple DIY home maintenance tips and ideas. (Money Crashers)
Saving for college – If you have children planning to attend college, you must read this story filled with tips on 529 plans and scholarships. (USA Today)
St. Patrick’s Day Dinner – Need a recipe to celebrate St. Patty’s Day on Saturday? Try this Corned Beef Brisket recipe. (Faithful Provisions)
Tax Cheating – Thinking of lying on your taxes? Don’t. The IRS may get help catching tax cheats. (Smart Money)
This post is copyrighted by BargainBabe.com. Any other site posting this content is violating the DMCA.
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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
viZZZual.com / Flickr
I share five must read blog posts about saving money every Friday.
Avoid bank fees – Find out which seven banks are still offering free checking and great interest rates. (Wisebread)
Feed Fido – Save money on your pet with these homemade dog food recipes. (Money Crashers)
Tax season is near – The Silicon Valley blogger shows you how life events affect your tax status. (The Digerati Life)
Protect yourself -Avoid identity theft by learning about the eight things you should shred right now. (MainStreet)
Home costs – Save money by getting these five fall maintenance jobs checked off your to-do list. (Bargaineering)
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To follow yesterday’s post on back to school deals, 16 states have planned tax free holidays for clothes, school supplies, and computers. BargainJack has a neat chart with the info, which I summarize below, and Time’s Moneyland blog has additional analysis. Here’s what you need to know:
Participating states: AL, AR, CT, FL, IA, LA, MA, MD, MI, NM, NC, OK, SC, TN, TX, VA.
Tax-free dates: Most states’ tax-free shopping days are THIS WEEKEND Aug 5-7, though some are later in the month.
Limits: There are per-item cost limits, like $100 on clothing. So if you buy a fancy leather jacket that costs more than $100, it will be taxed. If you buy lots of little clothing items that add up to more than $100, no tax. Some of the limits are as low as $20 per item on school supplies, but Tennessee has a generous $1,500 limit on computers.
Bonus: There are discounts in some states for hurricane preparedness items and sports equipment.
I have to say that in light of the debt limit fiasco and ensuing stock market fall yesterday, should our government be covering taxes on items like this? Are we as a nation getting too accustomed to perks like this?
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…)
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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…)
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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…)
