Five Simple Ways To Earn And Save Money

Save Money In 2015 photo
Photo by frankieleon

The year 2015 is finally here and my family has created some big savings goals. We plan to increase our income while cutting back on frivolous expenses. If you would like to save money this year than you may be interested in our money saving tips.

TurboTax

1) Carefully review your health insurance, tax information and retirement benefits. This year make sure that you have the best health plan possible and are taking advantage of any tax breaks available. You can use TurboTax 2013 to help you with your taxes. Using Turbo Tax 2013 is a better option than paying a hefty fee for professional services. By increasing your retirement contributions now, you can enjoy a worry free retirement down the road.

2) You can earn extra money doing the thing you love the most by starting up a small part-time business. If you enjoy woodworking, making crafts or organizing cluttered rooms you can sell your goods or services. This is a terrific way to earn a few extra dollars in your spare time.

3) Sell the things you no longer use. You can clean out your basement or garage and make some money in the process. You can sell gently used items online at Craigslist or through a local buy and sell group.

4) Weatherproof your home. Weather you are a homeowner or a renter who pays for utilities you can save a bundle this year by weatherproofing your house. You can save on both heating and air conditioning costs by sealing up any drafty windows in the home.

5) Get a cheaper cell phone and monthly plan. Far too many people pay too much for their cell phone. Rather than buying an expensive cell phone that comes with a pricey payment plan and long contract you can purchase an older model and sign up for low monthly services that can be cancelled at any time. You can even purchase a gently used cell phone for a bargain price.

Considering Your Home Mortgage Tax Deduction

Let Turbo Tax 2014 guide you at tax time.

Many people debate the merits of having a mortgage tax deduction when they file their taxes.

It makes sense to work at lowering your taxable income and getting all of the credits and deductions that you are entitled to, and claiming mortgage interest may be at the top of the list for you. Some homeowners think so much of this deduction that they forgo paying off their mortgage in spite of having enough money to do so. The question becomes whether it makes more sense to keep the savings or eliminate the mortgage debt entirely.

Home Mortgage Tax Deduction
English: An icon from the Crystal icon theme. Nederlands: Een icoontje van het Crystal icon thema (Photo credit: Wikipedia)

One example:

Q: I have enough financial resources to pay my mortgage debt in full and still have money left for emergencies. The savings account pays a low interest rate, and I am concerned that paying off my mortgage and losing this deduction will adversely affect me at tax time. I feel that I budget wisely, and I am committed to putting as much money in my retirement account as possible. What would you recommend?

Singletary: I would advise you to pay off your mortgage, but with the following caveat.

Review the items on your return, and remember that a tax credit is different than a mortgage deduction. Tax credits lower your taxable income, and deductions eliminate percentages of your tax obligation. You may pay more in taxes if you do not have a mortgage, but this amount may be much lower that you would pay in annual interest on your home loan. Keeping a mortgage just for a possible tax break does not make sense in the long run.

The caution about eliminating your mortgage refers to using your savings in the current economic climate. You should consider things like your job security, your health, and your ability to find work if you lost your job before you take steps to pay off your mortgage. You cannot predict when you may need an emergency fund of available cash, and tying up your money into your home equity may force you to borrow against your home or sell it. If you can continue to save for retirement and sustain a proper emergency fund, then I would recommend taking the steps to pay off your mortgage.

The Mortgage Interest Tax Deduction Is Being Eliminated

The mortgage interest tax deduction is going to be ditched. The president and CEO of the Mortgage Bankers Association, David Stevens, said the MBA is not religiously wed to the deduction. He said this is as long as any change is part of a tax reform proposal that is comprehensive and not just a one-off change.

Almost 44 million taxpayers deducted around $72 billion in mortgage interest from taxes, ending in the year 2014. However, by 2019, that figure may go up as high as $96 billion. This means this will be the largest tax breaks that individuals have ever taken.

Homebuyers who are middle-class benefit the most, as around 43% of taxpayers had adjusted gross incomes between $100K to $200K. Another 40% made less than $100K.

In the past, the MBA appeared to oppose attempts to reduce the deduction or to eliminate it. The statements by the CEO shows they are departing previous opposition.

Strange But Legitimate Tax Deductions from TurboTax.com

Strange But Legitimate Tax Deductions from TurboTax.com

Tax season is anticipated by some and dreaded by others. For accountants and tax professionals, however, it can be a time of amusement. Tax professionals are used to helping people get the maximum deductions on their taxes, but there are some deductions that take the cake. TurboTax professionals often highlight the odd, but legitimate, tax deductions that they see every year.

A boy in a children's swimming pool.
A boy in a children’s swimming pool. (Photo credit: Wikipedia)

Fido’s New Pad Can Pad Your Refund

Did you know that you can claim a deduction for moving expenses for your pet? If you are relocating for a new job, you can deduct the cost of your moving expenses, including extra expenses incurred to move your pet.

Swimming in Cash

Many people think of swimming pools as expensive investments that drain money from your bank account. If you, however, have a medical condition that is relieved through swimming, you may be able to deduct the cost of maintaining your pool as a medical expense.

Lose Weight, Gain Money

If your doctor has recommended weight loss as a means to improve your health, you may be able to deduct the cost of medical weight loss treatments.

Your “Enlargement” Can Result in a Refund Enlargement

An exotic dancer was able to claim breast enlargement surgery as a business expense. She argued that enhancing her appearance allowed her to earn more money in her business.

Tax professionals see it all between January and April. When you are ready to file your taxes, the professionals at TurboTax.com can help you to get every deduction and the maximum refund on your taxes.

Self Employed? – Here’s 5 Reasons Why You Need An Accountant

For the self-employed, tax time can be an entirely different experience than for those who are either employed by another company or own their own business. Being self-employed means that you are technically both an employer and an employee, and are at times responsible for paying taxes on issues that affect both.

Taxes are already complex enough for the average individual, but that situation is exacerbated by your current status. As a result, it may be wise to talk to an accountant, as they can not only find special deductions and benefits, but save you the time and anxiety of having to figure out your tax status.

1. Special Rules

In the United States, every working individual is responsible for paying tax for Social Security and Medicare. However, the amount of tax paid is typically split between the employer and employee, whereas with a self-employed person they are responsible for both. This is just one of a number of different rules and forms that change as a result being self-employed. Having a certified accountant will help you sort through the brambles and not have to worry about an audit.

2. Loopholes and Tricks

Regardless of what type of situation you are in, it’s never a bad idea to consult an accountant as they are far more educated on how to maximize your tax return. Every year the government passes legislation or makes changes to the tax code that affects businesses of all types. Special credits and other tax friendly programs may also be introduced but not publicized to the general public.

Accountants are paid to keep abreast of such situations and how they apply to their various clients. In fact, many of the special tax benefits and tricks apply specifically to those who own a business, and having an accountant experienced with the self-employed may end up saving you far more than the cost of the hiring one.

3. Time

Even if you are willing to sift through the morass of new forms, rules and special deductions and exemptions, the one thing you will inevitably lose is time. Paying an accountant to do your taxes will save you time to concentrate on running your business. Depending on how much income you can generate with that time, it may be that it’s more cost effective to earn money to pay for an accountant than do your taxes for free.

4. Advice and Audits

Accountants can also be relied upon for advice as to how to avoid certain tax penalties or qualify for specific deductions or exemptions. For example, as you can deduct equipment purchases over a single year or over a extended period of time, you can consult them on which deduction works best for your business. If you are by chance audited, a qualified professional can assist you with the process.

5. Online Alternatives

For some self-employed individuals, it can be very difficult to pay for an accountant given their limited financial resources. Relying on an accountant, however, doesn’t necessarily mean relying on a living person. Accounting software can be just as adept at finding the best deductions provided you give it the information they require.

As a result online software is best reserved for those that have relatively simple situations, especially self-employed individuals who will likely be using the standard deduction for much of their taxes.

John Hill writes on behalf of Public Liability Insurance dot org an online resource for business insurance including childrens liability insurance.

Charitable Tax Deductions That May Surprise You

There are many people who make charitable donations every year and document them so that they can be claimed as tax deductions. However, many of us fail to take all of our charitable donations into consideration when going through our tax deductions, with some failing to even realize that some of the donations they have made are tax deductible.

There are in fact many charitable tax deductions that may apply to you without you even realizing it, and some people are very surprised to learn about the various donations that are actually tax deductible. Some of these donations are ones that you might make off the cuff without even thinking about it – such as sponsoring someone that you know for an event – but it is important to make a note of even these small donations, as it all adds up and could make quite a difference to the overall amount you can claim on charitable donations.

Some of the surprising charitable donations that you may never have thought of logging down as being tax deductible include:

  • Sponsoring a person you know: A huge number of us sponsor people that we know, often many times a year, for things such as fun runs and sports events to raise money for a good cause. Whilst you may not be sponsoring a huge amount, every little helps, so you should make sure you have a record of it in the form of a statement of you paid by card or cheque or a receipt if you paid by cash
  • Getting to sites where you volunteer: There are many people that like to volunteer to help out at good causes, which often involves going to one of the charity’s sites. Whether you take public transport or drive yourself to the site, the amount that you spend in terms of fare or mileage can be claimed. This is something that many people overlook, but if you volunteer and travel to the site regularly it can amount to a tidy sum. Bear in mind that you can only claim if you are not being reimbursed for your travel
  • Cooking for charity: There are some people that devote their time to cooking for charity, whether it is to feed people such as the homeless or to prepare something as a prize or a competition. If this is something that you do, make sure you keep a record of the cost of the ingredients as this is something that you should be able to claim back
  • Donations of items you have purchased: Some people give to charity not by donating cash but through items that they have purchased. You can claim back for the cost of the purchased items – just keep the receipt and a record of which charity they have been donated to
  • Donating used items: Many people would never think that they could claim against used items that are donated to charity, but you can. You need to look at the cost or fair market value (whichever is the lowest) to work out the value of the donation you have made

These are just some of the charitable donations that many people overlook when working out their tax deductions. It is important to think not only about the more obvious donations that you make, but also the everyday donations that you might make, which can easily be overlooked.

Esther is a blogger and journalist who writes about loans, mortgages and other financial issues. She also maintains a blog for paydayloansuk.org.uk.

Some Weird Small Business Deductions

So, the holidays are over and you’re adding up your books (you’d BETTER be adding up your books-tax time is coming!). You know full well to add up your monthly income and common deductions like EI and CPP for your employees. But what are some deductions that you may have missed that could be costing hundreds of dollars? Here are some weird small business/self employed deductions that may never have occurred to you.

  • Cost of replacing materials. If you’re a writer/artist/photographer, etc and you need to buy new equipment, you can claim the new piece as a tax deduction. Even repairs can be deducted! Feel a little better about that new laptop now? (I know I do!)
  • Utilities/Telephone. If you work at home, you can claim a small percentage of your utility bills as business expenses (after all, you need power, heat and phone or internet to work!) Keep track of each bill because you may see a bit of it coming back to you.
  • Pet food. Did you know that if your animal is a service animal or are outdoor animals which guard your livelihood in some way, you may be able to deduct the cost of feeding the animals?
  • Child care. Even if you work at home and farm out the little monkey to a daycare or babysitter, you may be able to deduct the costs as a business expense so long as you worked while the kid was away.
  • Trips. If you headed off to a convention on entrepreneurship or on something related to your business, you may be able to deduct a good portion of your costs.
  • Transit passes. Don’t drive to see your clients but take the bus instead? Buy monthly passes, keep the receipts and claim them. Anyone can take advantage of this green friendly deductions, not just business owners.
  • Charity. Donating to others not only feels good, but can give you a good deduction come tax time.
  • Home maintenance. If you put in a new office for your business, new furniture, new plumbing, new power or something else that improves your business, you will be able to claim the expenses on your taxes. Neat huh?
  • Moving. If you’re moving to get closer to business opportunities, you can claim the move as a deduction. And don’t forget your pets! You can also claim expenses related to them such as pet carriers, vaccinations and having to pay deposits on hotel rooms
  • Erm… enhancements. That’s right, if you work in the… entertainment… business, you may be able to deduct a fairly busty amount from your taxes. But you have to show that the enhancements actually helped your work.

In short, keep receipts from anything even remotely related to your small or self-employed because you just never know when a small pile of minor expenses can add up to a solid deduction on your taxes this spring!  If you’re unsure, you could always ask a qualified Canadian accountant or even get more specialized and search through specialty regional websites for the exact thing you want such as Halifax tax planning.