Taxes

Despite the drubbing Congress gave it over not paying U.S. corporate tax on billions of overseas income, Apple actually has generated a lot of domestic tax, and American-based jobs that generate them. Besides, Congress set up the tax breaks that Apple used.

Do you live in a state that doesn’t tax retirement income? Then you save on taxes if you fund your 401(k) or other employer-sponsored plan instead of a Roth individual retirement account. If you plan on relocating when you quit working, look at how your new home state treats retiree income.

Federal taxes are up. So are some state taxes. Yet in response, opposition is rising, especially on the state level. With luck, the tax burden might recede.

But meanwhile, brace yourself. Years ago, I received valuable insight into Internal Revenue Service practices. The IRS was auditing a client of mine, who was late on his returns. The fines he faced were daunting. My argument was that the client, a small businessman, was taxed too heavily to stay in business.

Saving money in 401(k)s comes with a few strings attached – fees. The fees in retirement accounts are probably the biggest obstacles to saving successfully for retirement, and many of these fees are undetectable to the untrained eye.

The good news is that new regulations mandate that the fees be better disclosed. Pay attention to the information. If you are an employer, the rules impose new requirements on you.

Let’s look at how fees nibble away at your returns and how the new disclosures can help:

If you are coming out of a rough patch in your career, or just starting, it’s sometimes hard to figure out how to improve your finances. Basic money skills often are not taught in schools.

When you receive a financial windfall, you need to plan ahead to make sure you don’t lose the money. Some wealthy people with money seem to never let go of it and others lose it all in a jiffy.

Smarts and savvy barely begin to explain the difference. Planning and checking your beliefs about money are the keys to maintaining sudden wealth.

It’s easy to overpay or underpay taxes on your bond income and not even know it. Bond taxation is complex and there are several considerations that require different tax treatments. You need to be careful to avoid surrendering too much to the tax man, especially if you invest in zero-coupon or state bonds.

If you purchased a bond at par, also known as face value – 100 cents on the dollar – and held it to maturity, it is fairly simple. If it’s a taxable bond, you pay income tax on the coupon (interest) income. If it’s a tax-free municipal bond, you don’t.

People who successfully build wealth have one trait in common: They understand the art of frugality.

These unassuming millionaires know how to live on much less than they make, and they know how to save money. But those behaviors alone aren't enough. Not spending money today does not always result in having more money tomorrow.

Frugality for its own sake can result in doing without things that matter to you, failing to take care of basic needs like your health and living with a sense of deprivation. It can also lead to spending more money, not less, in the long run.

There is a relationship between money and feelings. Understanding it is key to your financial – and psychological – wellbeing.

Anyone who sent a check to the Internal Revenue Service this month certainly doesn't need to be convinced about the emotional link to money. I can personally attest that paying a hefty tax brings a great deal of pain.

Tax deferral allows investors to let their money work for them for longer. But in reality, the potential benefits now can actually trigger higher taxes in the future, and may not be worth the risk given market volatility. In fact, it turns out that in some situations the best approach isn’t to defer taxes, but to harvest capital gains and trigger them.