4 Steps to Setting Your Own Debt Ceiling

Use Your Tax Return for 2011 To Pay Down Your Debt

Debt is on everyone’s mind these days. The national debt has been covered by every major and minor news outlet for months. They finally reached a resolution to raise the debt ceiling. How nice. If only it were so easy for individual Americans to do the same. Unfortunately it is not, and many Americans find themselves in the same situation as their country. They are living beyond their means and are facing an impending crisis. So how do average American’s deal with their own debt crisis and pay the money owed to their creditors and on their tax return 2011?

1)Refinance

Interest rates have bottomed out and are at record lows. It is a good idea to look into transferring any debt held on high interest credit cards to a those with a lower rate. Pay close attention to transfer fees. You might also take out a home equity loan and go ahead and pay those cars off an cut them up.

2)Cut back

Austerity measures are something that has been advocated for the nation and it can work for you to. Find places where you can sacrifice some creature comforts for long term financial viability.

3)Pay more

By paying down your outstanding debt you reduce the amount of interest owed on outstanding balances. No one ever got out of debt paying only the minimum. Apply your 2011 tax return to this end.

4)Balance your budget

Set up a budget and stick to it. It sounds simple, but it is much harder to establish a budget and stick to it. However, once it is established it becomes habit.

Your Tax Return

Your tax return 2011 will need to be filed before April 15, 2012, for those not keeping track.  It’s important to be aware of the deductions you’re planning to take right now.  Keep track of your expenses and have them readily available for your tax professional to refer to when needed.

Preparing for your 2011 tax filing can be relatively pain free if you set up a system which organizes tax deductions, exemptions and tax credits. Start by having a clear understanding of your earnings.  Next keep a record of all your deductions.  Keep them organized by category.

Medical costs should be labeled and separated from other expenses.  Most people rarely accumulate 7.5% of their income in medical expenses, but many people do, so keep track of premiums for health insurance, taxi rides to doctor’s offices, co-pays costs, deductibles paid and medicines purchased.

Also keep track of taxes paid to the state and local jurisdictions, real estate taxes and interest paid for real estate. Keep a good record of church tithing and other gift giving. Watch your record keeping, don’t repeat things and don’t leave things out.  Allow your tax professional to throw out what cannot be used.

Preparing your 2011 tax does not have to be an ordeal, if you plan and prepare for their preparation.  Organize your records and keep the information up to date and properly labeled so both you and your tax preparer can identify them.  Be honest with your taxes because you don’t want to be audited and you want to keep a clean record with the IRS.  Always plan ahead and keep track of all your rightful deductions.

The Tax Rate For US Corporations And Microsoft

The US 2011 tax revenue should be higher than ever, if you look at the surging profits of corporations like Microsoft and others, but you may want to look at their quarterly results for some clues as to what’s happening to US corporate taxes.

Things were looking pretty good for Microsoft at the end of 2010, with a 30 percent increase in profit and a gain of roughly 35 percent per share. At the same time, the IRS and other countries didn’t see numbers anywhere near that.  In the United States Microsoft paid just under $500 million in taxes, and in other countries, they were paying as low as 7% rates on their multiple billions of dollars in profits.

Considering how important the deficit is in the political world today, along with the condemnation of companies who use overseas accounting work to get out of a good amount of their taxes, it’s interesting to see how Microsoft’s accounting wizards were able to work their number down to such a low amount.

Part of this, in fairness, was from an overpayment in the past, as well as Microsoft themselves generally overestimating the taxes they owe in a given year.  And they may be doing more business with individuals purchasing their products in other countries as well, but it’s hard to guess at what effect that may be making.

But it’s clear that Microsoft is able to channel buyers through the countries of Puerto Rico, Singapore, and Ireland, countries with extremely low tax rates.  By working through these countries, they are able to get around much of the amount they should be paying.

The standard tax rate on a United States corporation is 35%.  When Microsoft pays less than half that, you can see that revisiting the US corporate tax law may be necessary.

Handling Taxes Can Be Rough – Hire a Tax Consultant Instead

Managing your own business can be rough, especially if you’re a first time business owner. One aspect of handling a business that gives many people trouble is taxes. Learning the tax code can be very complicated and the law changes every year. If you want to stay on top, you need a professional that is up to date and can use the tax code to your advantage. An excellent tax consultant can help save you money, but sometimes trying to find one can be a hassle. If you want to stand any chance of recruiting a good consultant, don’t wait until tax season to do so. If possible, you want to book their services several months in advance. Even if you don’t think that you need a consultant now, why not give their services a try and see what they can do for you?

Handling taxes and legalese can be very complicated. If you’re not willing to learn the code yourself, hiring a consultant is the next best thing. As long as you find a trusted one, they can help save you unimaginable amounts of money. Of course, there is still the possibility of you hiring a green consultant, but if they are willing to learn, even someone new to the world of taxes can be a huge help. A fresh pair of eyes is always a good thing when it comes to managing a business. Make sure that before you hire someone, to check their background and former experience. Look over several candidates and pick the consultant whose speciality matches your business properly. Each consultant works in a specialized area, so you want to be sure that they can actually help you. The rules for tax applies different to single people, businesses, or contractors so choose the right person for the job.

It may be a hassle to hire a consultant the first time, but once you do, you often stay with the same person forever, except for retirement or death. Once you get through the upfront time consuming process of hiring, and they get the chance to show their stuff, they’ll be able to save you tons of time, money, and hassle. Many people with businesses that fail to have tax consultants sometimes run into trouble, so you may as well be prepared beforehand. You have no idea how much money you are leaving on the table until you hire the services of a good tax consultant.