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Standard vs Itemized Tax Deductions, Which is Better?

Understanding the many tax deductions can be nothing short of a minefield, and many taxpayers are unaware of the many deductions that can be used to legally reduce your tax bill. This article highlights just a few of the tax deductions that you can claim if your circumstances lend themselves. Standard Deductions A standard deduction … Read moreStandard vs Itemized Tax Deductions, Which is Better?

Tradition IRA vs Roth IRA: Which One Should You Choose?

Up until about 10 years ago, there was one type of IRA, the traditional IRA which was deducted from your taxable income, grows tax deferred, and upon withdrawal, is taxed at whatever rate you find yourself. Its cousin, the Roth IRA is the mirror image, the money you put in is after tax money, but … Read moreTradition IRA vs Roth IRA: Which One Should You Choose?

Tax Diversification — Why It Pays to Tax Diversify

Tax Diversification -- Why It Pays to Tax Diversify 5

We hear a lot about diversifying across asset classes — owning stocks, bonds, real estate, etc. We also hear a lot about diversifying within asset classes — owning mutual funds of hundreds of stocks rather than owning a few individual stocks. But there’s another, lesser-known form of diversification from which you could benefit: Tax diversification. … Read moreTax Diversification — Why It Pays to Tax Diversify

Self-Employment Tax and IRS Estimated Tax Payment

Self-Employment Tax and IRS Estimated Tax Payment 9

It’s a great feeling to be your own boss and make money at it. At least, until you discover that you are now responsible for paying self-employment tax and may be required to make estimated tax payments. I have been paying self-employment tax over the last few years; however, I have not made an estimated … Read moreSelf-Employment Tax and IRS Estimated Tax Payment

TurboTax Online Income Tax Preparation Software Review

TurboTax Online Income Tax Preparation Software Review 11

The other day I was wondering if I owe any income tax this year, so I decided to give Intuit TurboTax Online Federal Free software a try.  In general, I was impressed at how far online software industry has evolved over the years (not just Intuit’s).  For this 2008 tax year software, you could hardly … Read moreTurboTax Online Income Tax Preparation Software Review

Self-Employment, Estimated Tax, and Safe Harbor

Unlike my regular job, where my employer withhold a portion of my salary to pay various taxes — i.e., Federal, State, City, Social Security, and Medicare — there’s no tax withholding for my self-employment income.  To avoid any penalty, I have to pay self-employment tax and make estimated tax payments four times a year.  However, … Read moreSelf-Employment, Estimated Tax, and Safe Harbor