Tax Tips You Need To Know For Your Financial Freedom

If you are the kind of person that likes hot tips on anything, you will certainly enjoy the tax tips in this article as they will help you to reach the financial freedom that eludes so many people. Be forewarned that since tax laws are constantly changing, tax tips must also constantly change due to the never ending tax law changes that are handed down to us from our government. The reader is advised to check with their own tax professional to see how these tax tips affect their own situation.

When you are deciding where to place your purchased securities such as in a taxable account versus a tax advantaged retirement account you need to be mindful of the current tax implications. For instance, Bond interest payments that you receive are taxed at ordinary income rates, up to 35%,which is usually higher than the long term capital gains rates of 15% right now but could increase to 20% in 2013.

The final quarter of the year is a good time to “harvest” investment losses. If you have gains in your portfolio that you have to pay tax on, this is a good time to get rid of your losers to offset the gains. You can offset all your gains with losers plus an extra $3,000.00 more. If you have even more than that in losses, the amount over $3,000.00 is carried forward to use the following year.

Posted in Tax Suggestions | Leave a comment

Preparing Tax Accurately Is Important

If you are earning and if you need to pay the tax, you might know how difficult the task of tax preparation is. But lately, there are many ways by which this process is made simpler. You can do this by installing specific software in your computer or even do it online which is quite cheap and also very simple.

When one says tax preparation, they usually mean preparing income tax returns. It is usually done by the tax payer himself or they hire people to do it for them. It can also be done by a legally acknowledged person, company or attorney. In most of the countries, tax calculation is a hectic task and hence it is quite natural for people to consult help.

In United States of America, in the Internal Revenue Service, they have this Free File service that lets you prepare tax freely for people whose income is less than $58000 in the year 2010. They provide free internet forms of tax preparation and queries to your tax related doubts online. Lately, they have been encouraging tax preparation online.

Now, the tax preparers need not even be qualified enough to do this job. Anyone can do this. But by 2011, excluding the agents and attorneys, all other tax preparers will have to pass a test related to this so that they can prepare the taxes. They will also have to attend a course for 15 hours every year.

Preparing the tax is a very risky business. You have to do it with utmost care that there should be absolutely no mistakes. If there are mistakes, all the responsibility hangs up on the tax payer and not the consultant and hence when you choose them, you need to be careful as well. You can now do online tax return and tax preparation and save a lot of time.

If you are consulting a consultant by paying them, they will need to sign in certain parts of the form. It is just that they sign the document; all the data provided still hold you responsible for it. Before you submit, make sure you check it properly and is free of errors. Also make sure that there are no blank spaces.

If your consultant asks you to sign, never sign on a blank document or sign using any easily erasable ink. Always keep copies of what you have submitted as these are very valuable documents. Qualified tax preparers are not hard to find. So, when you make your choice do it carefully and select the best one.

Posted in Overtax Setting | Leave a comment

Taxes and Financial Freedom

When I do taxes for clients this coming tax season, one of the things I want to make sure of is that they have a safe overall financial picture. That doesn’t simply mean getting them the biggest possible tax refund.

Because of earned income credits, child credits and a host of other adjustments, credits and payments, clients are likely to receive large refunds. I’d hate to see them spend that money on things that don’t add to the freedom, security, stability and safety of their family.

I could easily just tell them to make sure they get the most tax exempt income possible. Make sure they account for all the losses they have in any business or real estate. Give to charities in a meaningful way. Contribute as much as possible to employer sponsored retirement plans along with an individual retirement account. But again, that’s not all I want them to look at. It’s not just about the big refund.

What I also want them to look at is do they have enough life insurance for themselves and their children. I want them to have enough saved for a rainy day. I want them to make sure that college planning for the children is taken care of. I want them to make sure they have enough income for retirement. I also want to make sure parents are teaching children how to save?

These are just some of the many areas that may need to be addressed. Working closely with each client we can determine what goals and plans they have and how best to use tax season to meet those goals.

In the long term, if they can stick to the plans we design, tax season can offer great opportunities for freedom, security and stability in their family’s financial life.

Posted in Monetary Independence | Leave a comment