In his blog post this week, Scott Spann wrote about some reasons not to contribute to a Roth IRA. But there are also lots of reasons a Roth IRA can make sense. Let’s take a look at each of his arguments: Continue reading “Reasons to Contribute to a Roth IRA”
When it comes to saving for retirement, most people know to contribute to their employer’s retirement plan (at least enough to max out their employer’s match) but there are also other ways of saving for retirement with some unique benefits that are not quite as well known. Here are 5 that you want to take advantage of if possible: Continue reading “5 Ways to Save for Retirement With Some Surprising Benefits”
Last week, we talked about how various sources of retirement income are taxed. Here are some strategies you can use to minimize those taxes:
Continue reading “How to Pay Less Taxes in Retirement”
While I don’t generally watch tv or even own one, I have to admit that I’m a huge fan of one particular show: The Apprentice, which is currently on the verge of the finale of its All-Star Celebrity Season. While the show has its share of mindless reality tv entertainment, there are lessons that can be derived from it, not just for the business world that the show is based on (albeit loosely) but for our own personal financial lives as well. Here are some financial lessons from this season’s celebrity firings: Continue reading “10 Financial Lessons From the Celebrity Apprentice”
Last month I took a phone call from a gentleman who is in the process of preparing for retirement. He has done a good job saving and now that he is getting ready to take distributions from his retirement accounts, he is concerned about taxes. We are often lead to believe that taxes will be less in retirement and for many taxpayers, that will be true not because of a change in the way things are taxed but rather because many retirees will be able to enjoy retirement on less income. Income sources are taxed no differently in retirement than they are while we are working. Sure, we receive an additional deduction once we turn 65, but the primary difference between our working and retired years is not how our sources of income are taxed, but the “sources” of income themselves. Continue reading “How Is Your Retirement Income Taxed?”
A friend of mine recently sent me an article titled “It’s a 401(k) World and It Sucks.” I realize that the 401(k) is not perfect (but what is?) and the author does make some good points. But that being said, “sucks” is a pretty strong word about the vehicle that has encouraged more retirement saving than anything else, especially considering how much we need to increase those retirement savings. Let’s take a look at each of the author’s main arguments: Continue reading “Does the 401(k) “Suck?””
The days are getting longer, but your fuse may be getting dangerously short if you are among the 25% of Americans who wait till the last two weeks to file your tax returns. Good old procrastination is probably responsible for many last-minute returns, but there are other reasons, too. Some people believe that the chances of an audit go down if your 1040 rolls in with the tidal wave of returns submitted on April 15, overwhelming the IRS. Others are still trying to get a hold of numbers and documents, not even sure what documents they need and what policies apply to them when it comes to reducing their tax burdens. So for those folks still spending their weekends indoors, despite the growing rumor that spring has arrived, here are some last-minute tips to save time and face when it comes to taxes. Continue reading “Tips for Tax Day”
As a sports fan, I see a lot of sports–related items in the news, on Facebook, on my Twitter feed…all over the place. Not too long ago, ESPN aired a special called “Broke” about athletes that earned tens of millions of dollars during their careers who are now completely broke. A lot of people have expressed a bit of shock and disbelief that someone who earns $10,000,000 or more in a short career can have nothing left just a few short years after their playing days are over. Continue reading “Why It’s No Shocker When Athletes Go Broke”
Have you had any of your employees question you about the DD in box 12 of their W-2? No, it’s not a battery style or bra size but a new requirement for W-2 reporting as a result of the Affordable Care Act. Effective with 2012 W-2 forms, employers with more than 250 employees are required to report the cost of employer-sponsored health coverage, and have the option of reporting the cost of a group dental or vision plan. Continue reading “What’s the Deal with the Double D?”
The IRS is a universally feared agency and for good reason. The IRS can garnish wages, seize bank accounts and lien property to those who owe them money! That is not their first course of action of course, but they have the power to do all of those things so getting a letter in the mail from the IRS is something everyone wants to avoid. Here are some tips on how to do that: Continue reading “How to Avoid an IRS Audit”
This past weekend I decided to prepare my 2012 tax return. I typically like to do this early in the year so that I get my tax refund sooner rather than later, but something very strange happened to me this year: I ended up owing the IRS money! This is unusual for me. I’m usually getting money back, but call it a case of bad luck or just Murphy’s Law, after writing last week’s blog post on how to estimate the right number of allowances to claim on your W-4 so that you end up close to breaking even with the IRS, I ended up NOT breaking even with the IRS. WHAT WENT WRONG? Continue reading “The Mistake That Turned My Refund Into a Tax Bill”
For the next several months, U.S. taxpayers will begin filing their 2012 tax return, and that means many will be getting a tax refund. In his article titled A Tax Refund Isn’t Always Something To Feel Guilty About, Associated Press personal finance writer Dave Carpenter states, “About 75 percent of individual taxpayers get a refund every year and the average amount is about $3,000.” Some taxpayers like the idea of a tax refund because they see it as a simple, forced way to save, often treating it as “found” money they use to pay off debt, go on vacation, or fund some other financial goal. Others, like me, see it as an unnecessary way of giving the IRS an interest-free loan. Regardless of which camp you fall into, you may be able to control the size of your tax refund by adjusting the number of allowances you claim on your W-4. Continue reading “Don’t Wait For Next Year’s Tax Refund”
When tax season rolls around, invariably I get inundated by tax questions. Every once in a while, a tax question comes along that offers a unique perspective on a common tax issue. Recently, I had two such questions come into my email box. Here is a summary of the situation, along with a couple of specific questions asked by this employee. Continue reading “The Tax Implications of Non-Child Dependents Can Be Tricky”
How many years worth of old tax returns do you have in your garage? Before I downsized and moved to a condo less than half the size of my house, I kept them all. I had three file cabinets in my garage so there was no urgency to throw any old documents away. Continue reading “Financial Records – What To Keep And What To Shred”
If you’re like most people, New Year’s resolutions are usually a source of endless disappointment. We start the year with grand ideas that often melt away before the end of winter. One of the biggest reasons for this is the tendency to try to do too many big changes at once, which causes us to burn out and get nothing done at all. That’s because we tend to overestimate what we can accomplish in the short run and underestimate what we can accomplish in the long run. To break things down, here are some ideas for each month to improve your financial situation in 2013: Continue reading “How to Make 2013 a Financially Productive Year”
Today is the last day of 2012. Tonight you will pop the champagne cork and pull out the glasses to toast “out with the old and in with the new.” Whether you are dressed in your finest sequins and rhinestones or your best suit or you are comfy cozy watching the ball drop from the comfort of your living room, you just can’t help to think about new beginnings. Tonight we shed the old and begin anew! Continue reading “Happy New Year! Three Financial Areas to Focus on in 2013”
If you’re like many Americans, you may be worried that an ability of the politicians in Washington to cut a deal could lead us over the so-called “fiscal cliff,” in which the Bush tax cuts would expire for everyone. While you can’t do much about the taxes on your income, you can at least protect your retirement accounts from higher tax rates in the future by converting them into tax-free Roth accounts by the end of the year. (In addition, many employers are allowing employees to convert pre-tax money in their current retirement plans into Roth accounts.) This conversion would allow you to pay taxes on the money at today’s relatively low rates and avoid the higher future rates. But does it make sense for you? Continue reading “Should You Do a Roth Conversion to Protect Yourself From the Fiscal Cliff?”
Talk of the fiscal cliff is everywhere these days, so many of your employees may be concerned right now about what will happen to their tax rates. While no one knows what Congress will ultimately decide regarding next year’s income tax rates, there is one cold, hard fact that isn’t getting much press – the Medicare surcharge. I wrote about this new surcharge tax last month, which increases the Medicare tax rate from 1.45% to 2.35% on amounts of earned income over $200,000 for single filers and over $250,000 for married filers. Here are 2 tips you can share with your high income employees who may be in danger of this surcharge: Continue reading “Year End Tax Tips You Can Share With Your Employees”
“Put down the mouse; move away from the computer and no-one will get hurt.” Continue reading “Stepping Back from the Fiscal Cliff”
With so many upcoming tax law changes, many of which are still up in the air, employees may be starting to feel the financial stress of worrying how these changes will impact them. Now is a great time to start planning for a year-end tax education workshop for your workforce to help prepare them for the following tax law changes: Continue reading “Providing Workplace Financial Education Doesn’t Have to be Taxing”
