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 Income tax returns make up the largest number of returns in the United States, followed by corporation income tax and employment tax returns. While the law in IRS publications states that such payment of tax is voluntary, the failure to file a tax return can result in criminal penalties that can include fines and imprisonment as well as civil penalties. Thus, the requirement to pay taxes is not voluntary; rather it is imposed upon all obligated to do so. Once the tax return has been filed, payment is required at the fixed time and place.
Do tips, wages and other compensation received for personal services amount to income and thus require that the income tax returns reflect such compensation? Are these ‘time reimbursement transactions’ subject to tax laws? Any income, regardless of the source, unless it can be established specifically to be excluded or exempted, is construed to be ‘gross income’ and thus require that income tax returns reflect it. This means that salaries, wages and any other economic benefit received from services performed or to be performed in the future are liable to taxation.
The Internal Revenue Code of 1986 imposes current income taxes as progressive taxes on individuals, companies and estates. While the income tax law of the United States is indeed complex, any exclusions or deductions are specifically stated by Congress and as a result, taxpayers are not expected to deduct or exclude income of any item from their income tax returns. Continue Reading »
 Americans claim more than $1 trillion in deductions in their income tax returns every year. And millions more claim standard deductions that amount to half of that in addition. But that’s not nearly enough for the IRS. It reports that of all the silly, avoidable mistakes we make on our tax returns, the ones we should pay special attention to, this year, have to do with not putting down enough allowable deductions. For example, if you just made it to 65, your prize is that you get to claim a larger standard deduction than the rest of us. Of course, paying taxes is good for the country. It means more roads and more schools. But what living, breathing human would want to be in hock to the IRS for any more than he or she absolutely had to? So what are the income tax deductions that we all insist on sparing the IRS on, most of the time?
A lot of mutual fund investors have the automatic reinvestment option turned on in their stock ownership. Whatever you make on your investments in dividends are just plowed back to buy you more shares. And that sets you up for bigger taxes coming from bigger assets. The thing is, when people cash in their investments, they forget that they already paid the taxes once, when those shares were bought. And so they just pay taxes on them all over again. Just make sure that you take note of how many shares you invested in to begin with, and how many you have at the end of your term. This may not strictly be a deduction though; it’s just that you shouldn’t have to pay twice for anything. Continue Reading »
 There’s not doubting it anymore, there is a significant amount of debt in this country. Although this is unfortunate, the only thing people can do at this point is try to clean up their debt and move on with life. Believe it or not; it is plausible. Even if you’re in debt 50 grand with credit card bills, there are government debt consolidation loans that may be able to assist you further with this problem. It is important to not assume you are alone in this. The reality is a grand portion of middle American is faced with the same burden of debt. Therefore it is crucial to take action now and get your debt in order so that you’re not left out in the cold when the government has already passed out all of its funding to other people. As an American, you should absolutely consider government debt consolidation loans as a means to improve your credit, have more money to spend each month, and get rid of that debt burden once and for all.
What’s the secret? The key is in the percentage rates. While you will see many credit card companies alter their interest rates from 6 to 20 percent, which can change at any time for any reason; government debt consolidation loans generally have a lower, more stable and more affordable rate. If you’re unclear why this is so crucial, it essentially determines how much you will have to pay each month, and how much interest you will be charged on a monthly basis. Interest can really add up to a great deal of money. Therefore it is imperative to seek out lower interest rates on your debt, so you can save money instead of paying it to the banks. Continue Reading »
 People mix tax shelters with tax havens. When you say tax shelters, people think of ashady prince or two in Saudi, or the British Virgin Islands or a faraway kingdom in the middle of Europe. But it doesn’t have to be anything exotic like that. Really, a tax shelter is just a program that the government has that anyone can participate in, for special tax benefits. For example anyone knows that if you donate to a recognized charity, you get a deduction – and that’s one of the most effective ways of retaining your money and not paying taxes. But even better would be to set up your life so that all your personal expenses can be seen by the IRS to be recognized deductions. And it’s not too complicated either; you just need to become the owner of a business.
Before you turn away to laugh in private, you have to understand what I mean really. You don’t really need to go and get yourself incorporated; you just need to declare on the appropriate form that you have a business – you know, as an individual private proprietor. And right away, everything you spend becomes a tax deduction. The IRS does know if such a thing is possible, and is legal as well. To prevent everyone from doing this too easily, they have a couple of simple rules, that practically anyone can ace. The rules only say that it has to be obvious that you’re doing it for profit, even if you never actually have a hope of making one. You can still have your day job. There are ‘businesses’ out there that run purely for the benefit they provide of being tax shelters that haven’t made a profit in 30 years and still have the IRS’ blessing. Continue Reading »
 When you’re planning for your retirement, not long from now, it’s easy to over-plan, to shortchange the present, driven by fear of the future. Of course the period of time that we remain nonworking, supported only by our assets appears to loom long and threatening, and often the panic that this inspires is well exploited by investing advisors who delight in selling financial advice to sell as much commission-earning retirement investments as possible, whether it would be the best thing for you or not. Anyone who has done even a little basic reading-up about retirement savings, would easily have heard of something called the 4% spend-down rate. This is the part of your nest egg, your capital, that they believe you could safely deplete each year without really getting yourself into any danger. What this means is, that if you have $1 million put by for your retirement, that you could safely spend 4% or $40,000 out of that each year, and add on a little for inflation too.
The way this goes wrong, is in how you keep planning your retirement years in exactly the way you plan your productive family-raising years. Once you’re retired, and your children have mostly moved out and are on their own, would you really need as much each year as you did in your years of vigour? What people would actually need to do is not spend in the same way each year of their retirement. People as soon as they’re retired, are still relatively young, and really could use a little bit extra money. They could start off by drawing about 6% of their nest eggs each year in the initial years. And over the following 20 years, that could come down by half, which is what people naturally like to do anyway. If you calculated inflation and spending in the traditional 4% way, you would have to reckon that a couple with about $1 million as retirement investments on their retirement day, figuring 3% in inflation each year, need more than $100,000 a year when they turned 80. What kind of 80-year-old couple ever needs that kind of money? Continue Reading »
Whether you’ve been living paycheck-to-paycheck, are trying to save for a down payment on your first home, or are hoping to one day retire in comfort, ON MY OWN TWO FEET can help. This succinct guide will teach you how to balance your desire to live well today with the need to save and invest for tomorrow. In this lively, no-nonsense financial primer you will learn:
* How much of your income to save
* How to avoid the perils of credit card debt
* How to create a budget you can live with (and still have fun!)
* How to invest wisely using a powerful, keep-it-simple plan
* How to deal with real life situations – such as figuring out how much home or car you can afford & how to handle money when you couple up with that someone special
ON MY OWN TWO FEET redefines Personal Finance 101. The sooner you apply the basic financial concepts highlighted by Thakor and Kedar, the more likely it is that you’ll achieve common life goals such as owning a home, providing for yourself or your family, taking fun vacations, and retiring in comfort — all free from financial stress.
Features:
- ISBN13: 9781598691245
- Condition: NEW
- Notes: Brand New from Publisher.
Avg. Rating: 5.0
On My Own Two Feet: A Modern Girl’s Guide to Personal Finance
 With lottery games in almost every state in the U.S., just about everyone has bought a lottery ticket at least once or twice, hoping to be that one individual who cashes in, big time. After all, a lottery ticket costs you just a buck, maybe two. Who knows? Someone wins, eventually. The Powerball lottery is a case in point. When someone wins the whole banana, that’s one newly rich person, with more money than they ever dreamed of, able to buy just about anything they might desire.
Of course, everyone knows that the odds are against them, but what the heck? Someone does win. In the Powerball lottery game, the prize may mount for weeks before someone hits that lucky combination, winning the lottery. In most cases, the person who wins the lottery is an ordinary Joe or Jane. (It’s always irksome when you read about the well-to-do person, not at all in need of money, but then winning the lottery.)
I find it rather odd when someone winning the lottery has a modest income and job, declaring that they’re just going to keep going to work, sitting on their lottery winnings like a hen on an egg. On the other hand, you read of people who win the lottery and just decide to go hog wild, spending their money like there’s no tomorrow. Just for the sake of argument, what would you do with all that money?
I remember reading a series in the San Francisco Chronicle, back in the late 1970s, which sought to follow the adventure – and pitfalls – of lottery winners, over a period of a couple of years. Most were ordinary people, who had never had any money to speak of, becoming suddenly wealthy beyond their wildest dreams. The temptations, inherent in having so much money, typically, in fact, in almost all cases, proved more than these winners could manage. Very few sought the advice of a financial professional. Continue Reading »
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