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 more Standard vs Itemized Tax Deductions, Which is Better?
We’ve briefly touched on the topic of paying income taxes on eBay sales in the past, but a lot of people are unsure as to whether additional income in general needs to be reported to the IRS. By additional income, I’m referring to anything that’s not part of your usual pay packet, which can include … Read more Additional Income: Is It Taxable?
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 more Tradition IRA vs Roth IRA: Which One Should You Choose?
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 more Tax Diversification — Why It Pays to Tax Diversify
Converting to a Roth IRA is not new, so what with all the buzz about about this Roth IRA Conversion event in 2010? What makes it such a big deal is that up until then, most people couldn’t convert to a Roth IRA because their income was too high. For example, in 2009 if an … Read more 2010 Roth IRA Conversion Rules, What Is The Big Deal?
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 more Self-Employment Tax and IRS Estimated Tax Payment
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 more TurboTax Online Income Tax Preparation Software Review
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 more Self-Employment, Estimated Tax, and Safe Harbor