Showing posts with label Tax. Show all posts
Showing posts with label Tax. Show all posts

Thursday, November 14, 2013

3 Tips to Simplifying Your Business's Payroll

Managing a business is never simple, especially when you begin to employ other individuals who work for you. When you want to run your business properly, having a clear grasp on your financial situation is essential at all times. Knowing how to simplify your company's payroll can help rid the stress of worrying about taxes and fees you may owe in the future. The more actively involved you become with your company's financial status, the easier it is to achieve success in any industry.

Work With a Professional

Working together with a professional CPA (Certified Public Accountant) or a business accountant is ideal whether you have just recently launched a startup company or if you want to manage a larger corporation responsibly. Professional accountants are capable of gaining insight into your financial picture quickly, giving you different options and routes to take to ensure you continue to profit and maintain stability. Utilizing the services of an online payroll provider provides many advantages, such as:

Use Software Regularly

Installing your own software to track payroll expenses as well as other financial investments or expenses can help you to stay in control of your business in all areas, including finances. There are many different programs that allow you to easily keep track of your investments as well as taxes that are due based on your employees' earnings or salaries. Using software regularly on a daily basis not only allows you to monitor sales and profit, but it also gives you more knowledge of the financial overview of all areas of your business. Just be sure to invest in software that provides quick input of required information (such as employee address, salary, deductions, marital status, etc.) and automatically totals taxes and withholding. 

Research the Affordable Care Act

You can also research the affordable care act to compare all of the options you have when it comes to your employees and their healthcare. By choosing a new healthcare plan to help cover your employees, you may need to re-configure the amount of payroll taxes you owe quarterly or annually, depending on the size of your business and the number of employees you have hired. To learn more about the affordable care act and how it can influence you personally and your business, click here.

Learning how to simplify your business's payroll can ultimately help to relieve you from stress and worry while ensuring all taxes and fees are always paid on time. The more engaged and involved you are with handling the finances of your company, the easier it is to build a successful business regardless of whether you are trying to launch an online eCommerce store or if you have a local business you plan to open.

Following these tips will result in significantly less stress as you prepare to tackle your businesses’ payroll.

Author Bio
Karleia is a freelance blogger. Away from the office and doing business she enjoys spending time with her two young daughters and husband.

Tuesday, October 22, 2013

Planning the Best Strategy for your Tax Affairs

There are so many aspects to taxation that it is impossible for a layman to understand everything. You certainly do not want to be paying tax when you need not, and if there are allowances that you can offset against tax, you want to know all about them. A specialist in tax is the answer for you, especially if your finances are particularly complex.


Even within the UK tax structure there are specialists working in small sections of legislation and for some people there may be the need for more than a single expert. If you feel you want advice, you need to find an expert with which you can discuss your personal scenario and take it from there.

You may need help on personal affairs or on those of your business. The process will be the same but you are likely to be guided to a different specialist after the initial assessment has been completed. If you are looking for help on a business level you may also need personal help on the assumption you may have large assets. There is always inheritance tax to take into consideration as well as your investments and pension provision.

Start the process

If you find the right company, it is likely that you can begin with a telephone call with no obligation at that stage. That call should identify your general needs. If you then want to proceed further, a meeting can be arranged where you are welcome to bring along your accountant or financial adviser to take things a step further. You are certain to be able to understand the fees involved and what you will get for your money before beginning.

Various areas

Corporate and personal taxation are just two of the areas that may be examined. There are strategies that can relieve you of stamp duty and pension products that maximise tax efficiency. Allowances against tax are widespread and 100% legal. You should be thinking about your taxable income each year and find out what can be done to reduce it. Protecting your assets where legal and possible makes absolute sense.

Inheritance tax is a common area where those with considerable assets need help. It is certain that you can find ways to reduce your liability if you make that call. Capital Gains Tax is another popular area that you can receive advice on and implement measures to handle it in the most efficient way.

Your money is hard earned and building up your assets will have taken hard work, and possibly very long hours. You want to protect them whilst obviously paying the tax that is due. That does not mean you should want to pay tax when it is not necessary to do so.

Tax planning can be fairly complex because it involves so many things. Budgets regularly propose and ultimately pass new legislation throughout the tax regime. If you want to keep abreast of things and know your affairs are being handled in the most tax efficient way, you need an expert.

Tuesday, October 8, 2013

When Is It Too Late To Start Your Pension

If you’re knocking fifty, chances are you’re becoming a little concerned about how you will pay for yourself upon retirement. The problem began in the 1980s really, when rich folks were having such a fantastic time under the Thatcher government that they forgot to start saving for their old age. Because of that, there are now millions of soon-to-be pensioners with no financial backing at all - so don’t worry too much, you’re certainly not alone. 

With that in mind, surely you must realise that even now you still have enough time to start paying into a pension scheme for when you retire. Okay, you won’t be a well-off OAP, but you’ll definitely be in a better position - that much is guaranteed. 

So, if you’re considering starting a late pension, then have a quick read through the rest of this short article and I’ll do my utmost to help you out. 

Find Out What You’re Worth

Before opting to pay into a pension scheme at this late hour, it’s important that you spend some time working out how much money you’re currently worth. You might find that you’re living in a fully paid for property that’s worth over £200,000, and if this applies to you, it might be more sensible to sell the house, downsize, and live off the profits. 

However, if you have no assets and determine your worth to be less than this amount, it probably is worth looking at your options for pension schemes.

Utilise Tax Relief Programs

Okay, so, you might not realise this but the UK government allows for tax relief on pension payments, meaning that if you pay into a scheme during your working life, you are taxed less on your wage. In effect, for every £1 you pay into a pension scheme, it only costs you around 70 pence.

Make Maximum Payments

As you’ll be joining your pension scheme far later than most, it’s vitally important that you opt for the largest payments possible. This will obviously depend on how much you can afford, but if you want to see substantial returns when you finally retire, it’s worth paying as much as you can now. 

Also, don’t forget that if your pension pot is large enough, you could still buy an annuity when you reach retirement age that would provide you with a stable income until the day you die. However, this annuity won’t be large enough to cover day-to-day living expenses if you don’t start saving fast.

Always Seek Impartial Advice

When looking for a suitable pension scheme you won’t really have a lot of time for calling round hundreds of different providers, so make sure you seek out advice from an impartial body who have your best interests in mind. Don’t simply trust the word of the pension provider, as they will nearly always claim they offer the best deal - and they can’t all be right, can they?

My grandmother was in the same boat as you last year, and she chose to get in touch with the annuity specialist, as they offered fantastic advice as well as pointing her in the right direction to find a good provider. 

I hope that helped somewhat and you now feel more confident about making the leap and sorting your pension out before it’s too late. So the answer the question proposed in the title of this article “No, it’s never too late”.

Thursday, September 19, 2013

Eight Financial Tips for Working Seniors

More and more people are continuing to work beyond retirement age. For some, it is a choice that keeps them active and involved. For others, it is a financial necessity. Whether work is a choice or a necessity, here are eight financial concerns that those who continue to work should keep in mind: 

1. You are entitled to begin receiving Social Security benefits at age 62. However, if you receive benefits before age of 66 and your earned income exceeds the set limit, your Social Security benefits will be reduced. At age 66, you will receive your full benefits regardless of earned income.

2. If, between the ages of 66 and 70, your earned income is sufficient that you don't need your Social Security benefits, defer them. For every year that you defer your benefits up to age 70, your benefit amount increases by 8% with an adjustment for inflation.

3. Consider the effect of employment on your income tax rate. Calculate your taxable retirement income from Social Security, pensions and retirement accounts and compare it to the current IRS tax brackets. If your earned income puts you into a higher tax bracket, put the amount of income that increases your tax rate into tax-deferred retirement accounts.

4. Take full advantage of tax-deferred retirement accounts. Older workers are allowed to save an extra $1,000 beyond the maximum annual contributions. Many of these accounts have having check writing privileges. You have the choice of standard checks or designer personal checks. This extra saving option adds money to your future retirement income and reduces your current taxable income.

5. Regardless of whether or not you are eligible for Medicare, take advantage of employer health insurance. Basic Medicare does not cover all expenses, and at best, pays only 80% of expenses that it does cover. Additionally, paycheck deductions for health insurance may be made pre-tax, which reduces your taxable income.

6. As investors approach retirement, investment strategies commonly switch from a growth-oriented portfolio to an income-producing one. Those who continue to work, however, are not relying investments for income. Moreover, earned income reduces the potential effects or a decline in the stock market. Those who feel comfortable with the risk could add to their future retirement income by continuing a growth-oriented investment strategy with some investments.

7. Keeping accurate records of living and employment-related expenses has two benefits. Accurately tracking living expenses enables you to make a more accurate estimate of your living expenses after retirement and assures that your combined Social Security benefits, pension, and investment provides a sufficient level of retirement income. Tracking employment-related expenses may lead to job-related tax deductions.

8. Studying your current cash flow and projecting it out for one year, three years, and five years for scenarios such as working full-time, working part-time, or retiring, enables you to analyze the benefits or necessity of working versus retiring. This study switches the emphasis from retiring on an arbitrary date to retiring as preparations become adequate to sustain the life you want to live. That is what retirement should be.

Author's Bio
Phillip Gruppelaar worked as a Sales Tax Inspector and Administration Manager before entering the finance industry in 1988. While working in motor vehicle finance he earned the “AIM Insurance, NSW Business Manager of Year 2000” award. He then moved to home loans and general asset finance including sourcing machinery finance. In 2007, he became General Manager of an online asset financing company, building it to be one of Australia’s largest and most successful. In December 2011, he returned to his own management consultant business and focused on improving client relationships and staff training for another of Australia’s large online finance brokerage firms.

Monday, August 12, 2013

What Type of Retirement Account is Right for Me?

When starting their careers after school, new members of the “real world” are likely given some options to invest their money. This can be multiple different avenues, and many of them can help prepare for the future. If retirement is on a person's mind, they may want to look at a couple of choices to help strengthen their financial strategy.

We at World Financial Group know that individuals need to think about retirement starting at an early age. This can be a tricky process, but there are many options available to help people achieve their goals. Starting early is important, and it can prevent delays in a person's fiscal plan later on.

Planning for retirement necessary from the get-go

Everyone wants to retire comfortably, but there may be some issues on how a person will accomplish those goals. By setting a strict plan from the time a person is getting into the working world, it can improve the chances of retiring on time.

  • Start saving now – There is never a point where it is too early to start putting money away for retirement, and delaying this process can hurt the chances of getting it done. 
  • Know what is needed – Having set goals are only as good as the likelihood an individual can reach them. Saving a set amount and working to increase that level gradually may put the person in a better spot later on. 

Not all retirement accounts made equal

Young people need to look at a variety of retirement options, and considering these choices should be a long process. When finding the right type of plan, a person can adjust their strategy to ensure they are in the best position to save a sizable amount of money.

  • Roth IRA – One of the best aspects of having a Roth IRA is that all withdrawals of the account are without any tax penalty. There are still some tax contributions, but the money taken out belongs to the person who owns the policy. This policy also allows for withdrawals before a person retires without a penalty, which can be beneficial if the account holder needs the money. 
  • 401(k) – This policy allows for an individual to work with their employer in order to build their retirement savings. If account holders put a certain amount of their paychecks toward this account, they may be able to get their employers to match their contributions – thus providing a nice boost to their savings. 

These available options can help a person get the tools they need to retire successfully. However, these may be even better if a person combines them with other diversified savings plans such as a nest egg account and a college fun for any children they may have.

Wednesday, July 3, 2013

So…Where Does All of Your Tax Money Go To?

Filing your tax returns is never fun business, especially when you don’t really understand where your money goes. For the most part, Americans know that their tax dollars help the government pay for infrastructure such as roads and defense for the country. But exactly how much of their money goes towards these purchases? Nowadays, the answer can be found with the click of a button. As promised in the State of the Union, you can now visit the White House website and input your income tax details to see how the Federal government is spending your money.

So exactly how does the government spend the income tax of an average American family which makes $50,000 per year and consists of two parents and a child? Here is a listing of the departments that the government pays for with income tax payments:

National Defense - 24.64%

The primary job of a government is to protect its citizens, so it is not surprising that defense swallows nearly a quarter of the average family’s income tax. This includes the massive 10.26% that is currently being spent on ongoing operations in places like Afghanistan. While many see defense as a necessary big-budget item, others complain that America overspends: the US spends more on defense than the next 19 countries combined!

National budget estimates for 2013:

Health Care - 22.45%

Medicaid and Medicare make up most of the healthcare category which provides cheap health insurance for the elderly, the disabled and those receiving a low income. A small fraction of the health care budget is also spent on health research and disease control which helps to maintain a good quality of public health for all those in the United States.

More info about healthcare spending in the US:

Job and Family Security - 17.26%

The Job and Family Security section of your federal income tax receipt makes up most of the welfare which covers a wide array of safety-net programs. The largest item within this bracket however is actually retirement and disability benefits for federal military and civilian employees. These benefits ensure that everybody from soldiers to teachers has enough money to retire and live contently. This is followed by food and nutrition assistance (including SNAP, formerly known as food stamps) at 3.89% and unemployment insurance at 0.99%.

Breakdown of Job and Family Security section and other sections:

Net Interest - 8.01%

The government currently spends more on running the country than it receives back in taxes, meaning that the federal government currently runs a deficit in the borrowed. As you are probably aware from credit card bills or your mortgage, interest can be killer and there is no exception when it comes to sovereign debt. In the case of the US, 8.02% of the average family’s tax money is spent just on servicing the interest on loans the US government has taken out. 

More info about the Net Interest paid by the government:

Education and Job Training - 3.30%

Considering that education is supposed to be the silver bullet, a surprisingly small amount of tax money is spent on maintaining K-12 education, college financial aid and job training from federal income tax. This department also provides training and positions for those who have disabilities. This number can be seen as misrepresentation however, as some state taxes also go towards funding education.

Breakdown of Education and Job Training section and other sections:

Veterans Benefits - 4.53%

Veterans benefits is probably the one section of government spending that requires no squabbling, as looking after those who have served their country is seen by many as a duty and not as an option. In fact, many are arguing for spending on veterans benefits to be slightly included so as to quicken the process of veterans receiving their benefits, as currently the Department of Veterans Affairs does not use a computer filing system and therefore many needy veterans must wait months (if not years) to receive their due.

More information and detailed breakdown on Veteran Benefits:

Natural Resources, Energy and Environment - 2.05%

Most of the energy and environment budget is spent on energy and environment concerns that most of us take for granted: reducing pollution, managing the nation’s water and undertaking conservation of our nation’s forests and protected areas. This section does contain some items that can be controversial: from the funding of renewable energy projects at one end and to the funding of oil pipelines at the other.

Breakdown of Natural Resources, Energy and Environment section and other sections:

International Affairs - 1.72%

Most Americans think a much greater proportion of the federal budget is spent on international affairs than actual is with a tiny 0.8% of tax payers’ money being spent on development and humanitarian assistance. The figure for international affairs also includes the 0.5% that is spent on the essential components of foreign affairs like funding embassies and America’s participation in international organizations.

Detailed breakdown of the spending:

Science, Space and Technology Programs - 1.06%

Just over 1% of your tax bill is spent supporting scientific research, with that money roughly being split evenly between NASA and the National Science Foundation. As well as funding big ticket items like shuttle missions and probes, money invested in science in the US pays back dividends in all kinds of unusual ways. For example, the Internet was pioneered by NSF back in the late seventies.
Detailed breakdown of this sector and other sectors as well:

Additional Programs - 14.99%

The remaining items on the itemized federal tax receipt are small-ticket items that nevertheless are essential to the running of the USA, including the cost of law enforcement, response to natural disasters, and Additional Government Programs which includes the cost of running federal government and paying congressmen, senators and the President.

Author bio: This article was written by Simon a blogger, content manager, financial expert. He is a financially conscious guy with a Msc. in International Economics. He is a longtime contributor to various financial, accounting, taxation blogs among others the authoritative taxation and accounting blog of the Wallace&Associates APC Los Angeles a tax consulting services company.

Wednesday, June 26, 2013

Types of Taxes

Taxes are a fact of life. They are necessary to fund various institutions, programs and projects such as Social Security, Medicare, the military, schools, emergency services and highways. There are many different types of taxes; however, the most common are listed below.

Federal and State Income Taxes

Most everyone knows what federal and state income taxes are, and they know that they must file them each year. Federal taxes are handled through the Internal Revenue Service, and the deadline to file is April 15 of every year. While many people will need to pay taxes at that time, some will get refunds.

The requirements for state taxes vary, and some states do not even collect taxes. However, most of them do. As such, it is best for you to inquire with your state as to whether or not you need to file. You should also ask when the deadline is. Additionally, if you own a business, you may need to file federal and state taxes more than once per year.

Property Taxes

If you own any real estate, you will need to pay property taxes, known in some states as real estate taxes. Real estate typically includes such things as a personal home, a rental home, a piece of land or a commercial property. These taxes are based on the assessed value of the property in question. 

Property taxes are often collected by the state or county that you reside in and in some states, you may also need to pay property taxes on such things as recreational vehicles (RVs), watercraft and pets. Requirements, restrictions and due dates may vary by state or county.

Sales Taxes

Just as with income taxes, you probably already know what sales taxes are. Sales taxes are collected on the state level, and you pay them whenever you buy something or pay for a service. The amount of sales tax you will need to pay depends on the item or service you pay for and the state you live in. 

Payroll Taxes

If you own a business and pay people to work for you, then you are responsible for paying payroll taxes. These taxes are taken out of your employees' salaries before you distribute their paychecks. Also known as FUDA or FICA, payroll taxes help fund such programs as Social Security and Medicare. 

Other Taxes

These are the most common types of taxes that you need to pay regularly. However, there are more taxes you may need to pay depending on your unique circumstances. These can include such things as excise taxes, estate taxes, tariffs, corporate taxes and capital gains taxes.

Tuesday, March 12, 2013

Top 10 Tax Tips For The Self-Employed

(Photo credit: patrick h. lauke)
Self-employment is a tough road to go down, but luckily there are a few things that you can benefit from. Self-employed individuals will have a different tax status to those who are employed by someone else. As a result, you are going to want to take a look at your taxes and see what you can do when it comes to making the most out of your situation.

Determine Your Net Income

Your net income is the income that you receive after all of your business expenses have been deducted. This can be done after a year of working to determine what you are most likely to earn.

Keep a Record

Make sure to keep a record of everything that you earn. Knowing how much you earned every week or month will allow you to figure out the proper rate at which you will be taxed.

Calculate Estimated Tax

Try to determine what percentage of your tax you are going to have to pay. Deduct this from your net income and you will have an idea of how much you owe.

Expenses for the Home Office

If you have a home office, then you will be able to make it a tax-deductible business expense. Remember that you are not able to deduct more than your net business profit.

Get an Accountant

Having someone to take a look over all of your expenses is a great thing. On top of this, you can also deduct what you pay from your accountant as a business expense.

Remember to Report

Making over $600 from a client means that you are going to have to report it to the IRS. When this happens, your client is going to give you a 1099-Misc.

Set Up a Separate Account

Get a separate account where you will be able to put all of your estimated taxes in. This is much easier than scraping for the money at the end of the year.

Keep a Track of All Business Expenses

Business expenses can include anything that you use in order to carry out your business. These can include your computer, your desk, your phone and your Internet connection. Make sure to keep a track of everything in this regard.

Remember to Pay Quarterly

You do not pay your taxes on a yearly basis. Instead, you pay every quarter of the year. This means you have to make sure that you have everything organized.

Keep Everything Together

Get files for all of the necessary expenses and tax records that you are going to need. Organizing all of this properly will ensure that you know what is going on when the time comes to pay.

Being self-employed can be difficult for many reasons, but it is always a good idea to keep on top of your tax returns. There are a number of things that you can also do for tax relief, so make sure to take advantage of them if you can. This way, you can ensure that you make the most out of being self-employed.

If you are interested in more tax relief tips, the author recommends you visit

Friday, February 8, 2013

More Structured Settlement Questions

Have you been awarded a large amount of money from a lawsuit? If so, you might be curious about structured settlements. The court will offer you a choice of how and when you want to receive your cash reward. You may choose to receive it all at once, or you can set up a long term payment plan. This long term payment plan is what is known as a structured settlement. Before you make any decisions regarding your reward money it is a good idea to learn as much as you can about how structured settlements work. Here are some more answers to your structured settlement questions.

Why Would I Want to Create a Structured Settlement?

There are many advantages to receiving your reward money in the form of a structured settlement. It will save you in interest taxes on any investments you make. It will also allow you to set up a steady stream of income so that you can properly plan for your future. Structured payments help ensure that you don’t accidentally spend all of your compensation at one time. Studies clearly show that compensation recipients tend to spend less of their reward if it is provided for them through several payments over a long period of time.

Will My Reward Be Any Less if I Choose a Structured Payout?

No. The amount that the court has awarded you will not change. You will receive the same amount whether you choose a structured payout plan or if you choose to get all of the money at once. However, structured settlement payments can help save you money in the form of taxes.

How Much Will a Structured Settlement Save Me in Taxes?

The amount that a structured settlement could save you in taxes could be substantial. You can expect to save approximately 25% to 35% of your total reward in state and federal taxes on any income your reward will generate. All settlement funds are tax free, but you will be taxed on any interest you accrue if you invest any of your reward. If you invest the single large lump sum you will end up paying more in taxes than if you invest using a structured payment plan.

How Much Flexibility Will I Have to Set Up This Form of Payment?

Structured settlements offer a tremendous amount of flexibility in determining how and when the payments will be made. You can set up equal payments over a set number of years. An example of this would be to receive $1000 a month for 20 years. You can set up payments on a per week basis, or you can set up monthly or bi-monthly payments. The payments do not have to be equal either. You could set up specific periods of time that pay out more than others. For example, if you were injured in an accident and require a new motorized wheelchair every 5 years, you could set up a payment plan that pays out more money every 5 years in addition to the regular monthly payments. This would allow you to pay for what you need when you need it.

What If I Change My Mind?

Once a structured settlement has been created it cannot be changed or altered. So if you currently receive $500 a month from a structured settlement and you need $1000 the next month, you cannot change your agreement. You can sell part of your total monetary reward to a company in exchange for receiving a lump sum of money now, when you need it.  The result of this form of transaction will be that you get all of your money upfront, but you will lose a percentage of it to the company.

Overall, structured settlements are very helpful to plaintiffs, but it is not recommended that you pursue this form of payment until you speak with a lawyer or tax professional. 

Thursday, January 24, 2013

Are You Paying Too Much Tax? – How to Claim Tax Back if You Are

Taxes (Photo credit: Tax Credits)
If you think you’ve been paying too much tax, then how do you claim tax back? Here’s the low down on how to get your money back and what to do if you think you’ve overpaid. Overpayment can appear in many guises, either through income tax, PAYE, self assessment, pension, savings or national insurance, so let’s take a look at each one in turn. 

Income Tax 

Tax on your income is taken from the amount that you earn each year and is broken down as follows. 

  • Anyone under 65 can earn up to and including £8165 before they’re taxed 
  • Anyone between the ages of 65 -74 can earn up to and including £10,500 
  • Anyone 75 and over can earn up to and including £10,660 
This system works well for a person with one full time job with a rate of pay that’s fixed. However it mightn’t be as straight forward for someone who doesn’t fit into this criteria. If you feel that you have been overpaying tax, then contact the HMRC, or use the free HMRC income tax checker. 


The majority of the UK workforce pay tax through the Pay As You Earn (PAYE) system which is deducted automatically from your salary. PAYE uses a tax code to determine how much tax you should be paying, but if your pay fluctuates or you’re not employed for the full year, then again, you could be paying too much tax. If you believe this to be the case, then you should contact HMRC and ask for a tax assessment. Claims can be backdated for as much as four years. 

Self Assessment 

If you are self employed and feel that you have been paying too much tax, then similarly to PAYE you need to get in touch with HMRC. You have four years to claim backdated overpayments. Alternatively if you need to make a claim, or to correct a mistake on your last tax form, then you can do so by completing an amendment form. This is again available from the HMRC. 


Tax can be paid either on personal, company or indeed state pensions and there may be a chance that you are paying over the top. This can be for a number of reasons. It could be that: 

  • You've been allocated an incorrect tax code 
  • Your entitlements have changed 
  • Your circumstances have changed (ie age) 
Again contact the HMRC explaining the situation, but you’ll need evidence such as your P60, P45, and any other information relating to your pensions and benefits.


The majority of savings accounts automatically deduct tax from the interest on your savings before it hits the bank. If you are excluded tax (ie filled in an R85 form) or your savings are in an ISA, then you shouldn’t have to pay standard savings tax. If you are, then ask for and fill in an R40 form and contact your local tax office. 

National Insurance 

If you’ve had a succession of jobs in one year then chances are could be paying too much national insurance. Visit the DirectGov website to check out if you are indeed paying too much and which form you have to fill in. 

In essence, if you are paying too much tax, then don’t worry unnecessarily. As long as you know who to contact and what forms to fill in, you should be able to claim tax back easily. Claim Tax Back at

Tuesday, December 18, 2012

Handy Tips on Effective Tax Returns

taxes (Photo credit: 401(K) 2012)

After the back to back financial slumps in and after the year 2008, the structure of the world economy has greatly changed. There are millions all over the globe, who do not have a proper credit history. Hence it becomes a difficult task for them to get a loan. Besides getting the loan, one also needs to make sure that they manage their taxes in a proper way. In this article we will provide the correct tax planning tips that will help one to manage their taxes correctly.

Possessing the correct information on Taxes

Having the correct knowledge of the tax that you need to pay is the most important thing. There are various kinds of tax that one needs to pay such as local tax, federal tax, income tax and others. Often it is found that one finds it difficult to understand the nature of the tax and how much exactly they should pay. In such cases it is a beer idea to hire a professional who has a fair idea in tax returns. Such professional will also be able to help you to find ways to save on your taxes. There are numerous ways in which one can save on their taxes using legal methods.

Maintaining a Record of the transactions

Keeping a record of the tax payable is an effective way of managing your tax payments. That way you will not lose track of the amount of tax that you need to pay and the time at which you need to pay it. Many a times it is found that individuals inadvertently skip their tax and eventually end up paying more. Maintaining a folder or a file will help one to keep abreast of the tax returns that they need to make.

Hiring a Professional Tax Consultant

Hiring a professional tax consultant is of utmost importance. The entire scope of tax returns is huge and it is virtually impossible for an individual to get a proper idea of it. There are numerous ways in which one can benefit by hiring a tax consultant. The most important benefit of hiring professionals is that, they will be able to help you in saving money on your tax. Moreover they will also be able help you to easy ways of tax return.  Hence resorting to the help of a professional is certainly a great way to manage your finances.

On a Concluding note

On a concluding note it can be said that in order to manage your finances in the best possible way, you need to keep in mind all the above mentioned points. A recent study has shown that many individuals lose thousands in penalties for not paying their tax on time. Hence you should consider hiring a consultant to manage all the aspects of tax return. There are many tax consultants out in the market. Make sure that you choose an experienced one to address your needs.

Author’s Bio: Alisa Martin is a freelance writer, professional blogger, and social media enthusiast. Her blog Money Exchange Rates focuses on Finance bloggers. You can follow her on Google+

Monday, October 29, 2012

Are You Responsible for Your Spouse's Tax Bill?

Income tax
Income tax (Photo credit: Alan Cleaver)
When you say "I do" you are not only merging your lives together you are also merging your tax responsibility. Unlike, your individual debt responsibilities, which are wholly an individual problem. Your tax responsibilities, when you file joint returns, can affect the other spouse.These liabilities include back federal and/or state taxes, child support, and unpaid student loans.

The IRS wants all couples to know that:

1. Tax, interest and penalties are a joint responsibility — even after divorce or death.
2. A divorce decree, written in stone, that your ex is responsible for your joint taxes, does not mean the IRS won’t hold you liable.
3. Even if none of the income on your joint tax return is yours, the IRS can still come after you.
For example, in 2010, you were a W-2 employee and your spouse was self-employed, and you filed a joint tax return. In 2011 you divorced, and your spouse left for parts unknown. Several months ago, the IRS audited your 2010 joint tax return and determined that not all of the income from your spouse’s business was reported.
The IRS agent is going to say that you are responsible for the tax plus interest and penalties, and your wages are going to be levied to pay this debt.

There can be relief, however, if you can prove that you are an “innocent spouse.”

1. If the understatement of tax was due to cheating, or what the IRS calls “erroneous” items, and
2. When you signed the return, you didn’t know, or have reason to know, of the under reported income, and
3. You did not benefit from that income, and
4. It would be unfair to hold you liable.
The IRS considers an erroneous item to be unreported income, or incorrect deductions. These include unreported cash income, as well as unsupported deductions like claiming expenses that were never incurred.

Not knowing, or not having reason to know, refers to:

1. The nature of the item. This means that if your spouse had unreported gambling income, and those records were totally maintained by your spouse;
2. Your educational and business background. In other words, should you have known or should you have questioned.Did you benefit? Are you living in a $1,000,000 house with reported income of only $100,000? Being unfair to hold you liable includes whether you received a significant benefit from the understatement, whether your spouse deserted you, and whether you are divorced or separated. There are two other types of relief — separation of liability and equitable relief. Under separation of liability relief, you divide the understatement, including penalty and interest, between the two of you. This relief covers unpaid liabilities due to tax understatements. The requirements are that you are legally separated or divorced, including widowed, and you did not live with your spouse for the past twelve months.

Equitable relief is provided if you do not qualify for either of the other two, and require, amongst other things, that you did not intend to commit fraud, and were not involved in a fraudulent scheme to defraud the IRS, a creditor, business partner, or ex-spouse, that it would be unfair to hold you accountable, and the income was not yours.

Thursday, July 19, 2012

Tax Lawyers Are Going To Be Very Busy

English: The United States Tax Court Building,...The United States Tax Court Building, in Washington, D.C., headquarters of the United States Tax Court. (Photo credit: Wikipedia)
The recent news concerning the ruling on health-care legislation, handed down from the Supreme Court, has made some angry and some glad. The Congress of the United States passed a law saying that all citizens are mandated to carry health insurance and if you did not carry insurance you would be fined. The case went to the Court and they determined that the penalty was just a tax and would be allowed under the U.S. Constitution.

In life they say there are only two certainties, death and taxes, with the recent ruling government will be wanting more of your tax dollars. As long as governments want a piece of your income, tax experts will be needed for legal advice on tax implications for disputes concerning property, estates, trusts, and finances. The kind of lawyer you need for tax disputes is one with a llm in tax law.

Tax law is its own distinct and separate legal area but it is also a companion legal area. By a companion legal area I mean, knowledge of tax law is necessary if you practice other types of law like business & corporate law, estate planning, and probate law. Tax law can also be integral to other areas of law like family law, bankruptcy law, guardianship law, real estate law, and securities law. Having a knowledge of the intricacy of tax laws can be an advantage. Without this kind of knowledge, the client will be missing out on vital knowledge that could make the difference.

Tax Law is a companion to other types of law but it is also a distinct legal area all to itself. A person that needs help can seek legal counsel concerning specific tax situations. Having a knowledge of  U.S. tax laws is only part of the solution. Each state also has their own specific laws and practices concerning tax law and that can be a challenge that a tax lawyer can help you with. 

Tax law has become such a specialized area of the law that many law schools have offered separate legal degrees above and beyond the basic law degree. This special degree is called a Master of Laws (LL.M.) in taxation. Many law schools have started llm tax programs in response to the rise in the specialty of a law practice and its higher knowledge requirements.

Tax law is even thought by the court system to be so highly specialized that there is a specific court that only hears tax cases. The U.S. Tax Court only hears cases that concern tax law disputes. Additionally, there is the U.S. Bankruptcy Courts and the Court of Federal Claims and all have jurisdiction in hearing federal tax cases. All this is guided by a separate body of laws which is the Internal Revenue Code. Add to that Treasury Regulations, Revenue Rulings, Revenue Procedures, Technical Advice Memoranda, and Private Letter Rulings.

Having to face the overwhelming tax laws we have in this country without a knowledgeable tax lawyer would be foolish. If you have a tax question or tax problem it's best to seek out a tax lawyer.

Wednesday, April 18, 2012

How to Make Money with Your Tax Return [INFOGRAPHIC]

This info graphic shows the magic when you save and invest your money. The trouble with most people is they don't have foresight or the patience to do this. That 55' Led 1080P HD TV feels so much better to buy. The payoff from owning the TV is immediate, the payoff from saving and investing is to far away to make that sacrifice.

This graphic brings home the point that a simple saving strategy pays off so well.

Make Money with Your Tax Return Infographic


Some Links to add to your tax day fun:

Saturday, March 24, 2012

Resources You Need to Know About Before Filing Your Taxes

TaxTax (Photo credit: 401K)So you've spent the last month dreading the thought of doing your tax return, but the day has come and you know it's time to get it over with. You sit down and pull up your tax software, and start answering questions. Name? check Address? check....Then, you run into that question that you're unsure about. It might be the number of deductions you can take, whether you are eligible for this credit, or how many business expenses you can claim. Whatever it is, you don't want to get it wrong and have the IRS come knocking at your door. But, you have other work that needs to get done, and you just want to get this damn tax return over with!

Here are three options you should consider that I've tried and tested over the years. Each one has its merits.
  1. The free solution - The IRS actually offers a free helpline that you can call to get tax filing help. Since it's a free service (besides the 15 minute wait time), it doesn't hurt to try this one out. If you're lucky, you'll get in contact with an enrolled agent who can help you with your question. However, the help service is notoriously spotty, with a recent Washington Times study showing 3 out of 10 people who call the toll-free helpline won't get through to a human being, and those that do are often redirected to the IRS website.
  2. The costly solution - Hiring a last-minute CPA or tax assistant to answer your question is also a popular solution (especially for business owners). However, beware that this costs anywhere from $100-200 per hour, and is limited to availability as the tax deadline approaches. The benefit here is you will be getting someone to do your taxes for you, whose job is to keep up to date with the current tax code.
  3. The happy medium - There's a clever new website called that offers a place where tax professionals will answer your personalized tax questions quickly for a set cost. For those of you with one-off questions that need to be answered, I would highly recommend looking into this. For an affordable rate (~$20), you get a certified CPA who will answer your question immediately. Not a bad deal if you ask me!
All said and done, what you're looking for is a quick, accurate, and affordable answer to your tax questions.

If you have the disposable income and are willing to pay for someone to do your taxes, hire a CPA (make sure you do your due diligence!).

If you are willing to do the gritty work of reading and understanding the tax code yourself, use the IRS helpline.

If you just want an answer quickly for an affordable rate, go to (Click here to bookmark).
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Friday, March 23, 2012

Paying Taxes With A Credit Card Can Be Expensive

TaxTax (Photo credit: Images_of_Money)Your taxes are coming due and you do not have enough money to pay them. So you push the easy button and pull out your credit card. Sure Uncle Sam takes credit cards but did you know that there is going to be a processing fee tacked on to your transaction.

You are going to pay the fee that credit cards normally charge merchants to use the card. The government wants the total taxes due and is not going to eat the transaction cost. If your credit card provides a reward program or miles that cover the extra fees it may be worth it. But generally, with the high processing fee it just does not make sense to pay by credit card.

Credit card payments to the IRS are processed by third-party providers. These companies charge a processing fee, which averages 2.35% (as low as 1.89% through and as high as 3.93% charged by The fee is a deductible business and individual expense.

For example if your tax bill is $8,000, a processing charge of 2.35% will cost $188 which will be added to your total transaction. So if you do not pay off your balance every month you will be paying interest on $8,188 as you slowly pay off your balance. Interest on top of fees makes the whole process, just not make sense.

Even if you pay off the entire balance, your rewards or miles probably will not offset the extra expense.

"Before charging your taxes on a credit card, check into installment options from the IRS, especially if your credit card has a high APR," says Bill Hardekopf, CEO of "The IRS will charge interest, but it may be less than what you would pay with your credit card."

If you must use your credit card follow these tips:

  • Make sure the transaction doesn't push you over your credit limit.
  • Don't write your credit card info on your tax documents.
  • Make sure your payment is treated as a purchase and not a balance transfer because the you will be paying higher interest and a balance transfer fee as high as 5%.
  • You can't cancel payments to the I.R.S.
  • If you can use your debit card than go to, where they only charge a $3.89 fee.

If you pay your taxes by credit card because you do not have the money, it is an indication you are not managing your money properly. Do not let this happen again next year. Start putting away the tax payment little by little every month.

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