When it’s time for you to buy a house, make sure that you aren’t just blindly following any advice. Make sure that you take your time to fully understand that you are getting into. Your finances are going to either take a major hit, or you’re going to be able to gain leverage when purchasing your dream home. The key to moving forward within this world is simple, you need to have patience, and you’ll need to also make sure that you’re in line with the tax breaks that help you, not hurt you. Without fully understanding some of the crucial tips for purchasing a home and possibly saving money on your taxes as a result, things can get really difficult.
One thing that H&R Block professionals recommend in regards to purchasing a home and getting the best opportunity at the same time is to look into claiming itemized deductions. These will help you pinpoint a lion’s share of deductions that standard solutions won’t allow you to get. If you bought a house in the past year, this will be amazing.
Go Beyond The Basics
When doing taxes, you need to focus on looking at beyond just the basics. You’ll find that a great deal can be dropped off your overall taxes, including deductions like interest, points, real estate taxes, and so much more. When it comes time to fill out paperwork, take a step back and allow a professional to look at your files. You may find out that there are some hidden gems in terms of deducting overall tax liability and more.
The Record Keeping Process
One of the most crucial tips that you can take with you today, especially when it comes to saving money on your taxes every year is to make sure that you have a clear picture of your finances, and anything that pertains to the purchase, sale, and upkeep of your home. It is a wise move to invest in a good filing cabinet and keep paperwork for upwards of 5 years. You’ll find that if you’re meticulous with this, you’ll make great gains moving forward with the world of purchasing a home, getting a mortgage, and saving money on your tax return.
One last thing you should remember is simple, hire a good tax preparation professional. Seek out qualified H&R Block providers and you’ll find that your next preparation could end up giving you a serious kickback in return.
There are two different types of annuities: deferred annuities and immediate annuities. The type of annuity you choose depends on how soon you expect to receive payments. If you are looking for a long term investment where you plan on making withdrawals once you reach retirement then you might choose a deferred annuity. If you are looking to make withdrawals sooner than you may want to choose an immediate annuity.
Either type of annuity can be fixed or variable. A fixed annuity acts like a CD from a bank but in this case it is an investment with an insurance company. You have a fixed interest rate that you receive for the annuity and it is usually a higher percentage than a normal CD would bring at a bank.
The guaranteed interest payment from these fixed annuities as well as the minimum amounts that you have to invest makes the fixed annuities appealing for those who are not confident in the ways of the stock market.
Another nice thing is that you do not have to pay taxes on the interest gained until you decide to start withdrawing the money from the annuity. A disadvantage with fixed annuities is that the interest rates might be high to begin with but can drop after the first year of having the annuity. This unknown factor can be a turn off for some who are hoping that they can maintain the rates that they first received when they started their annuity.
If you do not like the new rates and want to withdraw your annuity before it matures then you might be stuck paying surrender charges that will cut into your profits. With a variable annuity you can choose from a variety of investments to put your money into and the rate of payment you receive depends on how well the investments performed. With variable annuities you invest in several different stock or bond like accounts that will help your investment grow over a long period of time. Just like with the fixed annuities you pay no taxes on your gains until you begin withdrawing from your account.
Although with variable annuities you may have an opportunity to have greater growth potential with your investment there are some drawbacks as well. The investments you chose may take a turn for the worse causing your potential growth to plummet. There are drawbacks with the tax rates when you decide to withdraw you money,as well as fees if you decide to withdraw early and there can be high sales commission fees. It is good to do your research before you decide which annuity is best for you or even if an annuity is a good investment.
Welcome to the July 18, 2013 edition of Tax Carnival Ecstasy. In this edition we have 5 great articles starting with Daniel’s letter to the IRS disputing an insufficient funds charge. Bill Smith looks at reasons to adjust your w-4 withholding at work this year. And John Schmoll has investment advice for your retirement investing. Hope you like all the articles, bookmark, share, tweet and come back real soon.
John Schmoll presents Finding Strength in Our Lack of Investment Control posted at Frugal Rules, saying, “Investing in the stock market can be rife with emotion as stocks go up and down. While there is a lot we can’t control, there is much we can. By focusing on what we can control you can set yourself up for effective investing and start you down the road of investing for long term needs like retirement.”
John Schmoll presents What Makes a Company Worth Investing In posted at Frugal Rules, saying, “There are many things that you can look at if you’re interested in investing in stocks. By following some of the basics you can start to build a stock portfolio that will serve you well and help set you up for long term needs like retirement.”
That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.
The stock market is expected to take a beating if tax rates on capital gains are increased by two thirds. There has been a lot of debate as to whether or not the economy will benefit or suffer because of these changes.
Apart from capital gains taxes, income taxes are also expected to increase. These changes will cause a lot of problems in the future unless the President and Congress agree on contentious issues. These two parties must agree before the year ends.
Investors in the stock market will have to protect their investments just in case taxes are increased. Many of them will have to sell before the new laws come into force. This is because an increase from 15 percent to 25 percent means that investors who will sell next year will lose 10 percent of their profits. For instance, those who plan to sell this year and get $100,000 in profits will pay $15,000 in 2012 taxes. If the same people liquidated their assets next year, they will have to pay $25,000 in 2013 taxes. The difference is quite significant, and many people will decide to liquidate their assets this year.
If a solution is not found before the election, the stock market might just experience the biggest sell-off in history as people rush to liquidate their paper assets before the next tax year.
People often consider many factors, including tax rates, when making investment decisions. This means that investors will consider what they will pay in 2012 taxes before they invest in anything.
It might not be immediately obvious, but Mitt Romney has millions of his fortune in investments funds in the Cayman islands, an infamous tax refuge.
A representative for Romney says he obeys the law, and that he pays the normal taxes despite where his money is.
As Republican nominations get closer, Romney is finding it harder to keep the secrets about his wealth under wraps.
Jack Blum, a lawyer from Washington thinks Romeny’s financial situation is a disgrace to the United States tax system.
Romney recently let out that he has been paying only 15% in taxes, much less than most of us. He stated privacy as the reason for wanting to keep this information separate, but all potential presidential candidates have to expect people to look into their financial affairs.
Romney is not hurting for money. His fortune is estimated at 250 million, and he pays lower income taxes on his investments in the Cayman Islands.
Blum says channeling money through offshore accounts lets investors avoid many small fees and traps that they would pay if the same money was on US soil. The primary reason for having funds in that location is avoiding taxes.
It may not be illegal, but it looks bad to some people, and the tax havens like the Cayman Islands cause the US government to lose out on $100 billion in revenue every year. Considering his timing, Romney may be wishing his investment funds were somewhere else less suspicious right now.
Choosing to work on a personal financial strategy is made easy when using tools like the best retirement calculator. Enlisting the help of tools used by experts is always the best way to go. Nothing can be more helpful to financial planning than having tools that will make that planning easy to understand. The numbers matter. The tools needed must be reliable and accurate.
Retirement Savings Calculator
The retirement calculator has the strongest potential for making or breaking a savings plan. While the program is created by some engineer, it is the end-user being able to read the output that makes the most difference. A savings calculator allows the input of user data and then quickly outputs formidable information used in creating a plan. Every good plan will always begin with the right tools and then culminate in sound advice.
Your Retirement Plan
With the information that comes out of the calculator it is easy to decide what steps should come next. The plan is what comes next. The information will tell the user with some clarity what must be obtained and how it may be obtained for a proper and secure retirement. Most people want to retire at some point, they simply don’t know how and that is what puts the most fear in personal planning.
The Best Places to Invest
As the information is now available, it is also important for the user to have some advice on the best places to invest. After all, the information on retirement would be nothing unless the user has a place to make the data usable. With the latest tools and a good primary plan, it is always a good idea to ask a few question, but the blueprint being laid out will make the asking less likely to be controlled by the advisor. Starting with good tools puts the user in control.