It is now time to gather your receipts and accounts; the dreaded tax time. Have you already spent the big return that you think you will be getting? Or maybe you are scrambling to pay an anticipated bill. This could be the last year that you will have to live this nightmare. With just a little bit of adjusting you could owe nothing and get nothing. Coming out even is the goal.
Contact your boss or HR manager to change your W4 form Adjust the number deductions so that the right amount of taxes are withheld; not too much and not too little. There are two benefits to following this system; you will not have to deal with the stress of tax time, and you are likely to increase your take-home pay.
Check you return carefully. There are often deductions people miss because they are so weird. Believe it or not you can deduct the cost of a babysitter as a charitable deduction if you are leaving the house to do charitable/volunteer work. Unusual deductions like this are lurking everywhere and you are initiated to use any you can find.
We have used Turbo Tax for a number of years and find that it is very good a t finding the hidden deductions. If you have kept your records in Quicken it will even enter most of your information for you, and remember it for subsequent years. This is an easy fix, but whatever system you choose be aware that you have lots of choices. The aim of the game is to come out even., and the ideal from a sound financial point of view.
Showing posts with label financial system. Show all posts
Showing posts with label financial system. Show all posts
Saturday, February 12, 2011
Friday, July 10, 2009
Ups and Downs
We are all very aware that our current economic condition is not as positive as we would like. It seems that no matter how hard we try or what we do our hands are tied. Unemployment is up, prices are up, and investments are down. Thinking about this situation led me to investigate the state of our economy in the last 100 years to see if I could predict how long this would last.
Most experts agree that our financial system is cyclical; there have always been ups and downs. When we are down, like today, we can’t seem to remember the good times. When we are up we tend to believe that there is no down.
Look at this partial list from A History of American Agriculture 1776-1990. It exemplifies just what the experts have concluded. From the > on the list you can see that we have actually spent more time up than down, and we will be there again soon.
> 1909-18 Prosperity and war boom
1920-21 Sharp postwar recession
> 1922-29 Speculative boom
1929-1939 Great Depression
> 1939-45 Wartime recovery
> 1946-49 Postwar boom
> 1950-56 Korean war and postwar readjustment
1957-58 Recession
> 1958-70 Extended business expansion
1970-80 Inflation rates increased, while economic growth rates declined
1981-82 Recession
> 1983-88 Business expansion
1989-1991 Recession
> 1992-2000 Greatest economic expansion ever
The real lesson that we should learn from these patterns is fully ascribed in the Boy Scout motto—“Be Prepared”. If we planned and saved during the good times; we would be a lot more comfortable in the down ones. Living from paycheck to paycheck in the good times makes no sense. Any financial advisor will tell you that you should have an emergency fund of several month’s expenses for times like these. Even in lean times some savings activity should continue. It may not be easy, and it may not be very much money, but it is a good lesson in discipline that will serve you well, whatever the state of the economy.
Most experts agree that our financial system is cyclical; there have always been ups and downs. When we are down, like today, we can’t seem to remember the good times. When we are up we tend to believe that there is no down.
Look at this partial list from A History of American Agriculture 1776-1990. It exemplifies just what the experts have concluded. From the > on the list you can see that we have actually spent more time up than down, and we will be there again soon.
> 1909-18 Prosperity and war boom
1920-21 Sharp postwar recession
> 1922-29 Speculative boom
1929-1939 Great Depression
> 1939-45 Wartime recovery
> 1946-49 Postwar boom
> 1950-56 Korean war and postwar readjustment
1957-58 Recession
> 1958-70 Extended business expansion
1970-80 Inflation rates increased, while economic growth rates declined
1981-82 Recession
> 1983-88 Business expansion
1989-1991 Recession
> 1992-2000 Greatest economic expansion ever
The real lesson that we should learn from these patterns is fully ascribed in the Boy Scout motto—“Be Prepared”. If we planned and saved during the good times; we would be a lot more comfortable in the down ones. Living from paycheck to paycheck in the good times makes no sense. Any financial advisor will tell you that you should have an emergency fund of several month’s expenses for times like these. Even in lean times some savings activity should continue. It may not be easy, and it may not be very much money, but it is a good lesson in discipline that will serve you well, whatever the state of the economy.
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