Taxes

The Piggy Bank Strategy

Wealth starts with a goal, discipline, and saving a dollar at a time. Call it the piggy bank strategy. There are lessons in that time-honored coin-savings container.

Any seemingly gargantuan task seems easier to contemplate when reduced to baby steps. If you wished to climb a 12,000-foot mountain, and could do it a day at a time, you would only have to climb 33 feet daily to reach your summit.

How to Read Your Tax Form

Tax time is here, with the deadline for filing on Tuesday. Very few people do their own taxes, and many do not understand what the Internal Revenue Service form 1040, the central document of your return, says.

The components combine to tell the IRS your story. Following are some ideas for helping you understand your return.

Investing for Tax Benefits

The most wonderful time of the year this isn’t. With taxes and your returns due April 15 and changes in tax laws, a big surprise might loom for some of us. Smart investors re-tool portfolios now to save on tax days now and to come.

New for 2013 taxpayers: a 3.8% surcharge on investment income. To avoid this, you may look for investments that pay little or no income, ones relying on growth in value rather than dividend or interest payments.

Tax-Efficient Investing (Pt.1)

Investing just became a lot more complicated – and expensive – especially if you make a good living. You must squeeze every last advantage out of our tax system.

Tax Breaks to Pay for College

Going to college brings enough stress – not to mention debt. You can offset some costs of your education or your child’s with tax credits and reductions to taxable income. These credits and reductions, though, can trip you up if you’re careless.

For starters, you can take more than one education tax benefit in one year but generally your expenses must be segregated from one another in your reporting. In other words, you usually can’t take two tax benefits based upon the same education expenses.

Will the Gotcha Tax Hit You?

Income tax sits front and center of your mind this time of year. Another income tax affects you if you make enough and try to take certain deductions: the alternative minimum tax (AMT). It most often means you must pay more than usual. How do you know if this gotcha tax will hit you?

IRS Payment Fees Rise

Costs of doing business with the Internal Revenue Service recently rose for those needing special arrangements to pay taxes. Here’s what to know.

If you can’t pay your federal individual income taxes by the deadline of Tuesday, April 15, you may be able to set up special payment plans with the IRS. Some fees rose significantly.

Finding Free Tax Preparation

Lots of people find free tax preparation an excellent way to file. Here’s what to know before your return comes due April 15.

Quite a few providers allow you to prepare a simple return for free; complex returns cost more, of course. If you use a commercial organization to prepare your return for free, beware of add-ons that make a supposedly free process extremely costly.

How to Deduct a Home Office

The home office deduction tends to cow taxpayers. They often shy away from this write-off because they think it’s too risky.

Yes, the rules are complex. But if you have a bona fide home office and report your expenses the right way, you need not worry about getting into trouble with the taxman.

Beware Scams at Tax Time

Identity theft runs rampant during tax season. Here’s what to know and how to protect yourself.

Identity thieves often swipe your bank or credit card account numbers, birth date information or Social Security Number (SSN) to steal from your accounts, open a new and phony account or make illegal purchases. In 2013, 13.1 million consumers suffered identity fraud – the second highest level on record, according to a survey by Javelin Strategy & Research.

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