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Kira Botkin
Kira is a longtime blogger and serial entrepreneur who enjoys gardening, garage sales, and finding stray animals. She lives in Columbus, Ohio, where football is a distinct season, and by day runs a research study for people with multiple sclerosis. She hopes that the MoneyCrashers team can help you achieve your goals and live a great life.

How to Tap into a Roth IRA for College Savings & Education

By Kira Botkin

graduation student moneyIf you have children at home who hope to go to college someday (or someday soon), it’s important to plan ahead financially. College tuition is increasing every year and financial aid is never as generous as one could hope.

You might already be familiar with 529 college savings plans, but you can also take advantage of another way to save for college – your Roth IRA. While it won’t generally be suitable as your only method, it can offer several advantages.

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529 College Savings Plan – Best Way to Save for Your Child’s College Education?

By Kira Botkin

529 college savings piggy bankSaving for your children’s college tuition might seem like an unavoidable necessity. Financial aid doesn’t help everyone, and with education expenses rising, college scholarships aren’t going to cover everything. How much thought have you given to saving for your child’s education?

For many couples, planning for college is part of everyday budgeting. For others, there just never seems to be enough money available to start saving. Your child will be going to college before you know it. If you have five years left or even fifteen, don’t wait to start saving. Start today. When you are ready to take the plunge, make sure that you take a look at a 529 savings plan. Investing in a 529 plan is one of the most efficient ways to save for your kids’ college costs.

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401k vs 403b – What’s the Difference in these Retirement Plans?

By Kira Botkin

retirement plan bookOn my first day at my first job out of college, I was given a big packet of information about my benefits, including health insurance and retirement. I’d read about the 401k beforehand, but my packet instead had information on a 403b retirement plan. I was confused – what is a 403b, what’s the difference, and why did I get a 403b instead of a 401k?

A 403b is a tax-deferred retirement plan that is very similar to a 401k. That is, it allows you to set aside pre-tax dollars out of your paycheck to save for retirement – up to $16,500 per year, and for some people, the limit may be higher.

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IRA & 401k Required Minimum Distributions (RMDs) – Rules & Requirements

By Kira Botkin

hammer piggy bankThe government wants to help you save for retirement by giving you incentives like tax-deferred growth and deductible contributions through IRAs and work-sponsored plans.

But while the government forgoes taxes on the front-end, it doesn’t want to end up entirely empty-handed. At the age of 70 1/2, you’re required to start taking withdrawals from most retirement accounts; otherwise, you will face stiff penalties. These are known as required minimum distributions, or RMDs. They’re intended to prevent individuals from hoarding money, so the IRS can eventually get its cut of your savings.

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What Are Substantially Equal Periodic Payments (SEPP) – Rule 72(t) Distributions

By Kira Botkin

golden egg cash handIf you’re lucky enough (and prepared enough) to retire early, you may run into a little snag when you try to withdraw money from your IRA or 401k: You’ll be charged a 10% penalty for taking it out before the age of 59 1/2.

However, one way many early retirees get around this is by withdrawing specific amounts of money in substantially equal period payments, or SEPP. It’s also known as the 72(t) rule, after the IRS code section to which it refers.

An SEPP plan allows you to withdraw money without getting the 10% penalty, as long as you adhere to specific rules set out by the IRS.

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How to Choose a Certified Tax Preparer – 3 Common Tax Scams to Avoid

By Kira Botkin

taxes scam accountantIf you hate doing your own taxes, you’re not alone! More than 60% of Americans hire tax professionals to fill out those seemingly unending forms.

But while having someone else do your taxes can take a load off your shoulders, if you don’t choose the right person, you might have bigger problems. There are unscrupulous tax preparers out there looking to make a quick buck – and can get you in all sorts of hot water by finding less-than-legal ways to boost your refund or take advantage of you.

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First-Time & Repeat Home Buyer Tax Credit – Rules and Limits

By Kira Botkin

home buyer tax creditIf you were one of the millions of people who became a homeowner between 2008 and 2010, whether it was your first time or your fifth, your purchase will have quite a noticeable effect on your taxes. That’s not only due to the lovely bump you’ll get from deducting your mortgage interest and property taxes, but you may also receive a nice fat tax credit on top of that!

For many, participating in these programs will have effects for years to come. There are special rules to determine who’s eligible, as well as tax credits available for non-first time home buyers, and a special extension for members of the military and federal employees who were stationed outside of the country, which we’ll discuss below.

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How to Pay IRS Taxes – Online, Check or Credit Card

By Kira Botkin

pay taxes aprilAs we head towards the April tax filing deadline in the U.S., hopefully you’re working on your calculations or have everything completed by now. If you’ve gotten your total and see that you owe the IRS some money, don’t fret! There are many ways to get the IRS what you owe them in a timely manner.

Make sure that you’re confident of your calculations because the IRS will only allow two payments per year for taxes owed on a 1040 tax form, unless they send you a letter notifying you that you still owe money.

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How to Pay Federal Estimated Taxes Online to the IRS

By Kira Botkin

taxes pen calculatorAs a small business owner and freelancer, I’m amazed by how quickly my friends with full-time jobs get their taxes done. Their employers withhold taxes year-round, and all that my friends have to do is file by the IRS tax deadline in April to get a tax refund check in May. It’s like magic. But if you don’t have a human resources department putting tax money aside for you, you’ll have to pay estimated taxes four times a year.

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United States Tax History – Federal Income Tax History in America

By Kira Botkin

100 bill united statesTaxes can be so frustrating that we often ignore the significant and interesting role they’ve played in U.S. history. Though the idea of taxes doesn’t necessarily please the populace, the issue has certainly motivated Americans during key events.

Taxes helped start the process that would eventually lead to the Revolutionary War and America’s independence. The Stamp Act, Sugar Act, and Tea Act (which incited the Boston Tea Party) were tax and tariff laws placed on the colonies by England to raise revenue.

Since the revolution, taxes and national events have influenced each other in ways that can help you better understand your tax situation, and how everyone benefits from the prices we pay.

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Important Quarterly Tax Due Dates & Deadlines – IRS Tax Calendar

By Kira Botkin

tax return due

Taxes are a hassle. Dates and deadlines seem to sneak up without warning despite being relatively consistent from year to year. But getting organized and working on preparation throughout the year can make the traditional tax season less dreaded and much easier.

Keep these major tax dates in mind and mark them on your calendar. If the date falls on a weekend or holiday, the deadline will move to the next business day.

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List of the Most Common Federal IRS Tax Forms

By Kira Botkin

irs tax forms pileEach year we receive or fill out lots of tax forms, and each of these forms has a specific purpose.

Below, I’ll outline and highlight some of the most common forms. You can find more detailed information by clicking on the form’s name.

Form 1040

The most important of them all, the Form 1040 is the basic form on which you file your personal income taxes. There are many additional forms which you use to calculate specific items to put on specific lines on the main Form 1040, but you can’t file your taxes without this form. It comes in multiple flavors such as 1040EZ, 1040A, and 1040X. There are also more than a dozen Schedules (different parts to the Form), each to help you calculate the tax impact of different activities.

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What is a 1099 IRS Tax Form – 1099-INT, 1099-R, SSA-1099 Variants

By Kira Botkin

In an effort to help make filing taxes easier this year, we are breaking down the various IRS tax forms to help you know if you need them, and how to use them.

1099 tax forms stack computerIRS form 1099 covers many different kinds of income other than wages, salaries, and tips. Since you don’t have to submit copies of 1099s with your 1040 form when you file on paper, you generally only receive one or two drafts of this form.

While there are nearly two dozen variations on form 1099, the most common ones are 1099-INT, 1099-R, and SSA-1099. Another version you’ll see often is the 1099-MISC, which businesses use for payments that don’t fall under the other 1099 categories.

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IRS Federal Tax Form 1040 – Types, Schedules & Instructions

By Kira Botkin

1040 form pencilThe 1040 tax form was introduced in 1913, and its basic setup has remained essentially the same over the past century. The 1040 conveniently collects all of your income, credits, and deductions in one place. In fact, while there are dozens of other forms and schedules that you can use for additional calculations (such as Form 8863 for education credits or Schedule A for itemized deductions), each final number from all these forms is tallied on your 1040.

1040 Form Types

The 1040 comes in several different varieties:

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  • The regular 1040 is sometimes called the “long form” because, at two pages, it is the most lengthy.

W-4 Withholding Tax Form – Instructions for Claiming Exemptions & Allowances

By Kira Botkin

In an effort to help make filing taxes easier this year, we are breaking down the various IRS tax forms to help you know if you need them, and how to use them.

w-4 tax formEach time you begin a new job, one of the forms you’ll be asked to fill out is a Form W-4. This form helps your employer determine how much to withhold from your paycheck in taxes, based on the number of exemptions you claim on your tax return.

While this method is not very precise, it is fairly flexible, as you can adjust the number of exemptions you put down (i.e. adjust federal income tax withholding allowances).

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