Taxes

Best Tax Software for 2015: TaxACT vs TurboTax vs H&R Block

2015 is here and its time to get a head start preparing your taxes. Why? Because, according to IRS disclosures, it takes a person in the US an average of 13 hours to plan, prepare and file their federal taxes. For most of us, it can seem to take much longer. Luckily, even if you …

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 Iā€™m going to fill the entire month of July ā€“ one post per day ā€“ 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 …

The Simple Dollar Talks Politics (Sort Of)

Although I usually avoid politics like the plague, I felt this was an important issue to address. Yesterday, one of my fellow personal finance bloggers wrote a piece entitled What Is The War In Iraq Costing You? In it, the author makes the following statement: According to this report of the National Priorities Project, the …

Categories: Taxes

Don’t Fear The Higher Tax Bracket

One of my readers, Annie, writes: I am up for a promotion at work, but a coworker says that I shouldn’t try to get the job because it will put me in a higher tax bracket. Is this something I should worry about? Would I actually make less money after getting a raise? Don’t sweat …

Categories: Careers, Taxes

Tax Refund: 10 Things To Do & 5 Things Not To Do

Tax season is finally over, and millions of Americans will receive checks in the mail in the coming weeks from the IRS. Although I do some consulting and other independent work (which means that I don’t typically receive a tax return at all), my parents often received a very nice return (having a low income …

Categories: Investing, Taxes

Debunking Henry Blodget

Hopefully that title got your attention. In fact, it’s a variation on the subtitle of an article posted to Slate.com yesterday, Spend Every Dime!, which says that you’ll actually lose money by saving and investing it, so why not spend now? Normally I would ignore such tripe, but this article has been making the rounds …

Tax Witholdings and Savings Questions

Recently, a reader of The Simple Dollar contacted me with an interesting question about tax withholdings: With the tax year over, we get to see what we owe the IRS and the State in taxes. Normally we have our employers withhold amounts and send them to those entities, where they sit doing nothing. Alternatively we …