Taxes

A Roth IRA and The Future of Taxes

A few years ago, I wrote an article looking at the differences between a Roth IRA and a 401(k) with regards to how taxes will change in the future. If taxes go up, then a Roth IRA (or Roth 401(k)) is better. If taxes go down, then a 401(k) is better. When I’m offering financial …

Categories: Retirement, Taxes

The Ultimate Tax Guide for Veterans

As a veteran, there are specific benefits you can take advantage of to maximize your return when you file your individual income taxes. It is extremely beneficial to identify which types of pay and compensation are exempt from taxes so you know what is excluded from your gross income on your return. Eligibility for Veteran …

Categories: Taxes

The 5 Best Free Tax Software for 2014

The first thing to know about free tax preparation software is that every legitimate online tax software offers a free version. If you’re new to tax software, check out my post on the best tax software to see what products rank the highest overall and to learn more about how the software works. Remember, you …

Categories: Saving Money, Taxes

Best Tax Software for 2014: TaxACT vs TurboTax vs H&R Block

All the best tax preparation software companies have released their 2014 versions. After reviewing 15 online tax software programs and using the top products, I found three products worth recommending this year. The three best tax software products for 2014 are: 1. TurboTax 2. H&R Block 3. TaxACT Quick Update: I just filed my 2013 tax return for …

3 Reasons To File Your Taxes Early

This article first appeared at U.S. News and World Report Money. People like to wait until the last minute to file their taxes. The reason is obvious: filing taxes can be pretty dull. It’s not a task that anyone relishes and, because of that, people often put it off for as long as they can. …

Categories: Taxes

Five Simple Steps to Start Preparing for Tax Season

Like many Americans, I loathe tax season. Collecting documents, filling out forms, sending money to Uncle Sam – it adds up to a process that I frankly don’t really enjoy. Still, it has to be done each year and the time to do so is nearly upon us. Here are a few steps to take …

Categories: Taxes

File Taxes Online and Fire Your Accountant

Updated: January 21, 2014 I Saved an Extra $1,000 Using Online Tax Software I’ve been doing my taxes online for the past seven years. During those years, I’ve lived in Wisconsin, Illinois, Florida, and Washington. I was employed by three different companies. I started and closed three different businesses. I was an independent contractor for …

Categories: Saving Money, Taxes

Fear of Federal Income Taxes in Relation To Earning More

I get notes pretty regularly from readers who express concern that earning more won’t actually gain them anything. “Why should I earn more than I’m making if Uncle Sam is just going to take it all?” That perception is a complete myth. Yes, you will be paying more in taxes if you make more and, …

Categories: Taxes

Investments, Taxes, and Worry

Johnny writes in: The one thing that has kept me from diving into investing is fear of taxes. Every time I read about taxes and investments, it seems really, really complicated and I’m worried I’m going to be stuck with a big tax bill at the end of a given year even if I think …

Charity and Your Tax Bill

Edit: I made a mistake with the standard deduction math and explanation near the end of the original version of this post. I have since corrected it. Thanks to the readers who pointed it out. Monica writes in: Last year, I took the advice of my older brother and made several charitable donations during December …

Turning the Corner with a Side Business

A few weeks ago, I put out a call on Twitter and on Facebook for detailed posts that people would like to see. I got enough great responses that I’m going to fill the entire month of July – one post per day – addressing these ideas. Tammy on Facebook wants to know about “How …

Thoughts on Filing Taxes & Improving The Process

I considered posting this article during the actual tax season, but I decided to wait until the rush of actually filing taxes was over. Almost all of you who live in the US have filed your income taxes by now. Some of you – the self-employed or functionally self-employed, like I am – have filed …

Categories: Taxes

9 Things to Do to Get Ready for Tax Season Now!

With Christmas comes the new year, and with the new year comes the painful cycle of preparing one’s taxes. I personally loathe tax season – to me, it’s an example of how the government simply doesn’t work very well at all. The tax code should not be tens of thousands of pages in length when …

Categories: Taxes

How Much Do Taxes Matter To You?

Susan writes in: I feel so helpless as a taxpayer, watching the ridiculous directions the senate, house and president are taking my country. Being self-employed, in the medical field and living in NY I feel like I have three strikes against me. As Emma Goldman, the famous communist said, “If voting changed anything, it would …

Categories: Taxes

Rothe IRA vs. 401k: Taxes & The Future

One big point that I often bring up in favor of Roth IRAs is the fact that you’ve already paid your income taxes on it. When you take money out of your Roth IRA at retirement age, you don’t have to pay income taxes on any of your withdrawals. On the other hand, with a …

Categories: Retirement, Taxes

Six Things I Think I Think After Filing Income Taxes

(Many apologies to the great Peter King, my favorite football writer, for the title of this article.) Just this morning, I finished up my income taxes for 2007 (along with my estimated taxes for the first quarter of 2008), wrote a small mountain of tear-stained checks, and dropped them in the mailbox. This was my …

Categories: Taxes

Personal Finance 101: Capital Gains Tax

What Are Capital Gains and How Much Tax Do You Have to Pay? A reader wrote in wanting a simple explanation of a very hairy topic: capital gains and capital gains tax. I’m going to take a crack at explaining it in very simple terms, leaving out some of the specific vagaries of the United …

Categories: Investing, Taxes

The Future: Where Will Tax Brackets Go In 30 Years?

I try very hard to avoid political discussions on The Simple Dollar because it often winds up in partisan bickering, but I feel that a discussion about the future of taxes and their impact on your personal finance decisions today is vital. First of all, why is it important to think about future tax rates? …

Categories: Retirement, Taxes

Should I Prepay On My Home Loan Or Put It Into Savings?

I had a lengthy and interesting discussion with my wife this morning about the interest rate on our home loan. We are locked in at 5.875%, and I told her that at that rate, we were better off not paying extra on the loan and instead putting it away in an HSBC Direct account at …