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5 Tips to Prepare for an Enjoyable Retirement

By Michael Lewis

retirementAccording to a 2013 Gallup Poll, more than half of working Americans expect to retire by age 65 or earlier. However, this expectation stands in stark contrast to their practical readiness for retirement.

The 2013 Retirement Confidence Survey, performed by the Employee Benefit Research Institute and Matthew Greenwald & Associates, delivers the following unsettling statistics:

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  • In 2013, three of four Americans had total savings of less than $25,000, and an astounding 28% had less than $1,000.
  • Less than half of Americans have any idea how much money they will need during retirement or how much they have to save in order to reach that amount.

What Is a 1098 IRS Tax Form – 1098-C, 1098-E, 1098-T

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.

There are multiple versions of Form 1098: the 1098, the 1098-C, 1098-E, and 1098-T.

1098 Form

1098

The original 1098 form is used to report mortgage interest to the Federal Government, as well as to the person who paid the interest. That person can then deduct the interest they paid on Schedule A.

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Taxes on Government Benefits – Unemployment, Social Security, Disability & More

By Kira Botkin

social security money government benefitsYou may think that government benefits are tax-free, but that isn’t necessarily the case. In fact, several of the most common benefits claimed by Americans – unemployment, Social Security, and disability – do generate a tax bill. If you receive government benefits, understanding and keeping track of what will be taxed is key to getting the most out of the program and not being in for any unpleasant surprises.

At first glance, this may seem difficult, but there are several fairly simple steps to understanding how much tax you must pay on your benefits each year.

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What Is IRS Capital Gains & Losses Tax – Calculate Rates & Deductions

By Kira Botkin

capital gains moneyWhether you’re new to the world of investing, or you’re thinking of selling stocks, bonds, or real estate you’ve had for some time, it is important to consider how you’ll be taxed on those items.

Since you only pay taxes on the profit you make, it’s necessary to keep good records from the time you acquire them through the sale process. Depending on when you acquired the assets and when you sell them, you could substantially alter how much you’ll pay.

Below are the definitions and general tax rules for capital gains and losses.

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Filing Taxes After Divorce – Tax Implications & Claiming Children

By Kira Botkin

divorce taxes childThere are many unfortunate effects of a divorce, as it tends to complicate every aspect of your everyday life. In addition to the many challenges it presents, you must work to untangle your financial situation, and following a complicated divorce, tax issues become even more complex than they already were.

If you’ve been through a divorce, then you know how tough it is to prepare for every situation. Fortunately, the IRS has a comprehensive list of circumstances for divorced and separated individuals in its Publication 504.

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Tax Deductions for Charitable Contributions & Donations

By Kira Botkin

donation boxAs you may know, you can deduct qualified charitable contributions on your taxes – and this is one reason why December is such a great month for many charities. Not only is everyone  is in the holiday spirit, but they are also preparing for tax season.

However, beyond simply writing a check, there are many other ways you can help the less fortunate while lowering your tax bill. The IRS gives generous allowances for many types of donated items, but it’s up to you to save your records and know how much you’re entitled to deduct.

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Do I Have to File Taxes and How Much Do I Need to Make?

By Kira Botkin

file taxes womanFiling taxes is nobody’s idea of a good time. The process can be lengthy, confusing, financially straining, and even downright intimidating. However, while many people have tons of questions about tax filing, there’s one that’s not often asked: Do I even need to file a tax return? You may be one of the lucky few who can avoid the process entirely.

There are three factors that determine your filing requirement: age, income level, and filing status. Generally, if you earned less than a specified amount according to those three factors, you won’t have to file.

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Form 1040X Instructions – How to File an Amended Tax Return

By Kira Botkin

1040x tax formIf you spent days poring over your tax return this year and mailed it in by the tax filing deadline, only to discover that you forgot to claim the computer that you bought as a work deduction, don’t fret. You can still claim this deduction, as well as fix any other errors you may have made.

Essentially, the IRS allows you a “do-over” on your taxes. You can fix any mistakes after your initial tax filing, by utilizing Form 1040X. And you may have more time to do so than you think.

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Filing Taxes for Kids: Does My Child Have to File a Tax Return?

By Kira Botkin

business kid taxesIf your kids discovered the joys of capitalism this year, raking in the dough from paper routes or pizza delivery, or receiving stocks or bonds instead of toys for their birthdays, they may also get to experience the joy of taxes this April. You may be surprised to find that, as dependents, your children have different rules for when to file taxes, and on what income, than you do.

When you pay your own taxes, you’re entitled to a personal exemption of $3,900 for tax year 2013. Therefore, the first $3,900 of your income isn’t taxed. When you claim your child as a dependent, you get to deduct their personal exemption on your taxes, which means your child doesn’t get to use it on theirs.

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How to File for an IRS Tax Extension Electronically or With Form 4868

By Kira Botkin

tax season lateMy best friend is chronically late for everything: dinner, work, parties, you name it. Unfortunately, this behavior can have dire consequences when tax season rolls around. Several years ago she was in a panic because it was April 14th, just before the tax filing deadline, and she had yet to file her taxes. She rushed through the paperwork and drove to the post office to drop them off in the mail slot at 11:58pm.

What she didn’t know is that the IRS allows you to apply for a six-month extension on filing your tax return. So, if you don’t have it all together by tax day in April, don’t panic. You can extend all the way to October.

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Tax Implications of Retirement Accounts – IRA & 401k Distributions & Withdrawals

By Kira Botkin

seniors retirement moneyWhen your retirement accounts are growing, it’s great to see the numbers climb. But when you retire and start taking money out of your IRA and 401k, the taxes you owe can take a surprisingly big chunk out of your total. Hopefully you’re taking advantage of the tax breaks that come with contributing to most retirement accounts, but are you ready for the taxes and penalties that you’ll deal with when you retire?

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Ultimate Guide to IRS Schedule C Tax Deductions & Expenses For Small Business Owners

By Kira Botkin

stack of receiptsIf you run a small business, perform freelance work, or have other side income, you probably know exactly what you earn – but you may not be keeping a close eye on what you’re spending. And properly tracking the money you spend to run your business is incredibly important come tax time, especially if you’re to get the most out of your tax returns.

Take a look at the following guide to Schedule C deductions, and you may find that you’re missing out on some key tax deductions for self-employed freelancers and small business owners.

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Standard Deduction vs. Itemized Tax Deduction – What’s Better?

By Kira Botkin

writing calculator taxesOne of the biggest breaks the IRS provides is in the form of deductions, which allow you to reduce your taxable income and thereby pay less in taxes. You may be accustomed to taking the standard deduction, which is a preset amount. Or, you may choose to itemize deductions on Schedule A. The choice is up to you.

For most taxpayers, the amount of the standard deduction and the itemized deduction are different. Typically, your tax preparation software or accountant determines which will give you the lowest tax bill. However, understanding the difference yourself, particularly what types of expenses you can deduct on Schedule A, can help you maximize those deductions and make better choices throughout the year to reduce your taxes.

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Deducting Health Insurance Premiums & Healthcare Expenses on Your Taxes

By Kira Botkin

doctor healthcare costsThe cost of healthcare has been growing much faster than inflation, and will likely continue that trajectory considering the changes implemented by the Patient Protection and Affordable Care Act. This unfortunate trend may leave you wondering if you have any recourse to save money and reduce the impact of costly healthcare at all.

Plus, if you are not currently covered by health insurance, you may be required to purchase it with the implementation of the individual health insurance mandate in 2014. Though some income groups will receive assistance to afford coverage, many won’t and will face a fine for not purchasing adequate coverage.

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4 Education-Related Tax Deductions and Credits for College Tuition & Expenses

By Kira Botkin

college grad moneyUnless you were born with a silver spoon in your mouth or the ability to perform a jump shot on par with LeBron James, your or your children’s college education is going to cost you. Public colleges cost an average of $22,261 per year, and private universities boast a massive average tuition price of $43,289. And according to the U.S. Department of Education, college seniors now graduate with an average of $28,186 in student loan debt.

Despite the fact that you cannot fully escape high tuition costs, there are ways to alleviate some of the financial burden. The Federal Government currently offers four tax credits and deductions that can save you bundles of cash at tax time.

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