IRS Tax Form 1099-DIV – How Are Dividends Taxed?

1099 div formMany investors choose to invest in dividend-bearing stocks, or mutual funds focusing on dividend payers, as part of their portfolio. And those dividends can pay off in a major way. Investing in dividend-bearing stocks can be a great choice for investors who are thinking long-term. You may receive dividends in stock or cash, and you can frequently reinvest cash dividends to buy more stock.

Depending upon how you receive dividends, you may need to plan ahead for tax day. Specifically, it is important to understand the different types of dividends, what you can expect as far as paying taxes on them, and how to read the 1099-DIV tax form so you’re adequately prepared.

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Box 12 Codes on Tax Form W-2 Explained

w2 form penBelow is the explanation of the Box 12 Codes on the W-2 tax form.

A – Any uncollected Social Security tax or RRTA tax on tips. You’ll include this amount in your total tax liability on your Form 1040.

B – Any uncollected Medicare tax on tips. You’ll include this amount in your total tax liability on Form 1040.

C – If you had group term life insurance through your workplace, the premiums for any value over $50,000 become taxable income to you and are included here.

D – Contributions to a 401k or SIMPLE 401k retirement plan.

E – Contributions to a 403b retirement plan.

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State Tax Rates Comparison – Sales, Income & Social Security Tax

percentages tax ratesThe Federal Government taxes everyone’s income according to the same scale, but each state has the ability to set different types of taxes on its citizens, including property tax, sales tax, and income tax. This means the amount of tax you’d pay if you live in Florida may be vastly different than the amount you’d pay if you live in California.

For some states, property and sales taxes are the main sources of revenue. In fact, several states don’t collect income tax at all. Depending on your long-term financial goals, you might want to consider living in such a state – or, at the very least, do your Christmas shopping in a state with no sales tax.

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4 Reasons the IRS Can Seize Your Income Tax Refund Money for Debt

seize moneyIf you’ve recently filed your taxes and were expecting a nice fat refund check, you may be shocked if you check the tax refund status and discover that it’s no longer coming.

Believe it or not, there are several situations in which the IRS can rightfully seize your refund. Therefore, before crying foul and blaming the government for making a terrible mistake, consider whether any of the numerous reasons for tax refund seizure could apply to you.

Reasons for Tax Refund Seizure

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9 Ways to Improve Your Car’s Gas Mileage and Drive Efficiently

efficient drivingAs gas prices remain high, improving your car’s mileage is crucial. By stretching a tank of gas further, you can reduce the amount of times you must fill up per month, which can help you stick to your budget. This is especially important for those who purchased non-efficient cars when gas was cheaper. But regardless of what car you drive, you can always use a little extra money at the end of the month, and cutting back your gas expenses is a great way to pad your bank account.

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What Is a 403b Retirement Plan – Contributions, Withdrawals & Taxes

403bMany people know that you should contribute to a 401k account to secure an enjoyable, comfortable retirement. But if you work for a nonprofit, a state agency, or a university, your employer might offer you a 403b instead.

A 403b is very similar to a 401k: Both retirement accounts are tax-deferred, which means that you don’t have to pay taxes on the money that you deposit, though you do have to pay taxes on money when you withdraw it. Depending on how your employer sets up the accounts, you may also be able to contribute simultaneously to a Roth 403b, which allows you to contribute on an after-tax basis and avoid paying taxes on withdrawals.

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11 Factors That Affect Car Insurance Rates – How to Lower Your Costs

car insuranceWhen shopping for car insurance, it can be tempting to reduce your rates by choosing lower amounts of coverage or by raising your deductibles. These are, of course, the two most obvious factors that affect the cost of your auto insurance.

You may not realize it, but your overall rate is also affected by many more different factors – some of which you can control, and many of which you cannot. However, knowing what affects your rate can help you make a more informed decision when purchasing insurance, and can help you know exactly what to do to lower your expenses.

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What Is a Fixed-Rate Mortgage Explained – Definition, Pros & Cons

fixed-rate mortgageWhen shopping for a home mortgage, there are a dizzying array of options available to you. The most popular option is the fixed-rate mortgage, which offers an interest rate that does not fluctuate for the entire length of the mortgage.

With a fixed-rate mortgage, the homeowner can make the same payment each month until the mortgage is paid off. However, that predictability can come with higher closing costs, and the traditional 30-year fixed-rate mortgage is one of the toughest mortgages to get approved for. While there are certainly disadvantages, getting a fixed-rate mortgage can make sense for some buyers.

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5 Things You Need to Start a Small Business

small business ownerOwning your own business may seem like the epitome of the American Dream. You can be your own boss, keep your own schedule, and answer to nobody but yourself – no wonder so many people idealize being a small business owner.

However, while working for yourself can seem ideal, most people are not prepared for the amount of time, money, patience, and research that starting a business entails.

What Do I Need to Start a Business?

To determine whether starting a small business is right for you, it’s essential to know what will be required of you to start and maintain your endeavor.

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10 Reasons to Continue Working After Retirement

working seniorWhen you picture yourself in your golden years, are you sitting on a beach, hitting the golf course, or working behind a desk? For many people of retirement age, continuing to work makes perfect sense.

However, this doesn’t mean that you can’t balance your work life with enjoyable activities, such as vacation and family visits. Instead, going back to work can be a complementary activity to a fulfilling life. And whether it’s done voluntarily or out of necessity, working after retirement can offer many benefits. In fact, check out some of the best job ideas for retirees.

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