American Tax Service

Helping Americans File Their Taxes

Oct
24

By

How the Student Loan Interest Tax Deduction Works

Category: Deductions Tags: , , , , , , , ,

Student loan interest can quickly add up. That’s why the Federal government introduced the student loan interest tax deduction to help ordinary students out. If you made interest rate payments on your student loans during the tax year, you could deduct up to $2,500 in interest paid.

student loan interest tax deduction

If you happen to qualify for the 22% tax rate, you have the best deal because your maximum deduction is $550. A few hundred dollars in your wallet for doing very little sounds great, so how can you make sure that you claim the maximum deduction amount available to you?

What You Need to Know About the Deduction for Student Loan Interest

Whenever you pay off your student loan, it’s not a case of just paying off the amount you borrowed. You’re also paying the interest rates. When you take advantage of the student loan interest tax deduction, you’re essentially taking off the interest paid against any taxable income, which ultimately means you pay less in tax to the Federal government.

For example, let’s say your income came in at under $65,000 for the previous year. You will qualify for the maximum interest rate deduction. From $65,000 to $80,000, this deduction is reduced.

You can take this deduction without itemizing. So, you can also take the standard deduction.

Take note that if your parents took out the student loan in their name, they would have to claim the deduction on their tax return. However, if your parents registered you as a dependent, neither can claim the deduction.

Finally, you can also take this deduction if you’re paying off your student loan while still in school full time.

Are There Any Other Deductions for My Education?

The American Opportunity Tax Credit is the best tax credit for claiming back cash when you’re still in school. If you meet the conditions, you could claim up to $2,500. The Lifetime Learning Tax Credit can also be claimed and is worth $2,000. But do keep in mind that you can’t claim both.

You must examine the conditions of each and see which credit would be best for you.

When married and filing jointly, you have two choices. You can claim the student loan tax interest rate deduction or one of the above education credits.

Is Student Loan Refinancing the Best Option for You?

That depends on your situation.

education tax credits calculator

First, you need to work out what you already owe and the interest rate on that. Then, if you have more than one loan, you’ll need to calculate your average interest rate.

Then you need to compare what else is available. The higher your credit score, the lower your interest rate. We recommend using a 5% interest rate if you’re unsure what your credit score is.

Repeat the first step with the new loan available and see if you will actually save money in the long run. If so, you should refinance your existing student loan.

Is it Necessary to File a Tax Return?

If your earned income exceeds $12,000, you must submit a tax return. This applies even if you were claimed as a dependent on your parent’s tax return. If you fail to do so, the IRS will charge you 25% (or more) extra on top of your existing tax bill. Plus, you won’t be entitled to any tax refund.

The IRS still recommends filing a return even when your income is under $12,000. By doing that, you’re entitled to claim a tax refund. It’s extra money for a little paperwork, so it’s worth filing regardless.

Are Your Parents Able to Claim You as Dependent on Their Tax Return?

Yes, your parents can claim you as a dependent when they file their taxes. But some criteria must be met first:

  • First, you must be 19 or younger and live with them for six months.
  • Second, your parents must have provided you with more than 50% of your total finances for the year.
  • Third, you’re 24 or younger and are in school full time.
  • Fourth, you have a complete and permanent disability.

If your parents have claimed dependency for you, you subsequently can’t claim dependency for yourself, and you can’t get education credits or the student loan deduction.

Are Your Scholarships Taxable?

Fellowship money and scholarships are exempt from taxes. So if your scholarship isn’t taxable, you don’t need to add it to your tax return. However, take note that the portion of your money that’s used for rent, travel, nonessential equipment, or research is taxable. This must be reported with your gross income.

How Can I File My Next Tax Return?

The tax filing deadline for 2019 was April 15th. Most students and graduates will use online tax preparation software to make it easier to file their tax returns.

These programs are ideal because they will guide you through everything, and all you must do is enter some basic information about your income and circumstances. It will then provide a recommendation as to which credits and deductions you should take.

What Paperwork is Required to File Your Taxes?

There are three documents you’ll need to fill out your taxes. These are:

w2 form online

Form W-2 – This is your tax statement detailing your earnings. You’ll get the W2 form through your employer

Form 1098-T – Students will receive this from their school. It’s a tuition statement.

Form 1098-E – Your statement for any interest paid on your student loan. If you happened to pay interest on your student loan, you’d get one of these. If you paid at least $600, you’d receive this through email or via the mail.

If you paid less, you’re still able to take this deduction, but you’ll need to contact your loan provider to receive it.

We also recommend saving any receipts from any educational purchases you made. This includes books and tuition. You should also have a record of any scholarships, as you’ll need these figures to file your tax return.

What if I Went to School in Another State?

If you had a job and paid income tax in another state, you’ll need to file state tax returns for both the state you studied in and the state you come from. But laws vary on this issue, so you should find out more information about this.

Most tax preparation platforms already have this built-in, so you’ll know when you try to file.

What if Made an Error on My Tax Return?

Mathematical errors tend to be caught immediately by the IRS. They will tell you about these, and you’ll be asked to send additional information.

But if you simply didn’t claim every credit and deduction you were entitled to, all is not lost. It’s possible to submit an amended return to the IRS. There’s a three-year deadline from when you filed the return and a two-year deadline for paying any tax owed.

Traditional tax accountants and online tax preparation software will allow you to do this.

How Can I Claim the Student Loan Tax Deduction?

online tax filing

The tax filing deadline is usually April 15th. Most students and graduates will use online tax preparation software to make it easier to file their tax returns.

These programs are ideal because they will guide you through everything and help you claim all the student tax deductions you qualify for. All you have to do is enter some basic information about your income and circumstances. It will then provide a recommendation as to which credits and deductions you should take.

Oct
13

By

Child and Dependent Care Tax Credit 

Category: Credits Tags: , , , , , , , , ,

What is the child and dependent care tax credit?One of the most difficult financial burdens, when you have young children, is paying for dependent care, but some good news is that there are some relief options when it comes time to file your taxes.

What is the Child and Dependent Care Tax Credit?

The child and dependent care tax credit is available for almost anyone who has a dependent and is working.

The dependent care tax credit is different than the child tax credit, and this article is intended to help you understand how to claim the childcare tax credit.

How do I Qualify for the Child and Dependent Care Tax Credit?

How to qualify for the dependent and child care credit.

To qualify:

You must have at least one dependent child or adult who cannot provide their own care. You also must be working and receiving an income to qualify for this tax credit. If you have a spouse, they must also be working or unable to provide care for the dependent at home (for example, if they are on disability).

Generally, the child must be your dependent and under the age of 13. However, there are specific circumstances for children and adults older than 13 to be eligible for the credit.

The child must also live with you at least half the year in the case where custody is split between parents or guardians.How much is the child care credit worth?

The daycare center must also be a qualifying provider for the credit. You do not qualify if you pay your adult children to supervise your kids during the day.

For specific qualification scenarios and questions, it is always best to check the IRS’s official website (www.irs.gov) or speak with a tax professional.

How Much is the Child and Dependent Care Tax Credit Worth?

It can be tricky to calculate exactly how much the tax credit will be worth when it comes time to file your taxes. However, the basic starting point is that you get up to $3000 for one dependent and up to $6000 for having multiple dependents in dependent care.

You do not get that full amount back as a credit, however. Instead, a sliding scale based on your adjusted income will provide a percentage of this amount that gets credited back on your taxes.

For example, let us also assume that you have 2 dependents living with you for the entire year, and you spent $4800 on dependent care through the calendar year. You could expect a $1440 tax credit on your return based on these rough parameters.

This is a significant credit, which is different than a tax deduction. Essentially, this money will go back into your pocket or directly reduce the amount of taxes you owe for the year.

Can I Claim Child and Dependent Care if I Have a Higher Income?

Learn how to claim the child care credit>One of the nice things about the child and dependent care tax credit is that it does not disappear with higher incomes. So while the percentage is less, this credit is designed with working families in mind, and you can still get a good amount of the expenses you pay for dependent care back in your tax refund.

Claim Your Credit With Online Tax Filing

Today’s online tax filing is up to date with the latest tax forms, including the new child care and dependent tax deductions and credits. You can easily claim the dependent and child care tax credit.

Online filing services can import your W2 information into your tax return so you can avoid worrying about your forms being delivered via snail mail.

How to File Taxes Online Using TurboTax

When you file with TurboTax Online they will search over 350 tax deductions and credits to find every tax break you qualify for so you get your maximum refund.​

Oct
13

By

Rental Property Tax Deduction

Category: Deductions Tags: , , , , , , ,

Deciding to become a landlord can be highly beneficial for yourental home financially. However, it also comes with a significant amount of work.

As well as the general responsibilities associated with running a rental property, you need to find tenants, pay all your expenses, and ensure you have insurance.

In personal tax terms, renting out a property can complicate the situation. There are rental property tax deductions available to help you out with running your business, though.

Different deductions are available from the IRS. However, remember that the IRS says that these expenses must generally be accepted within the rental industry and should be ordinary in nature.

There are deductions for many things, such as interest on your mortgage, repairs to your home, and insurance plans.

Interest on Your Mortgage

Practically every homeowner will need to take out a mortgage to finance their property purchase. If you’re one of those landlords who possess a mortgage, one of the largest homeowner deductions you can take is the interest payments on your mortgage.

You can’t deduct anything that pays off the original loan amount, but any amount you pay to pay off the interest is fully deductible.

Your mortgage statement will have your interest-related payment every month. Just take one of these statements and find your monthly interest payment area. Then, multiply this figure by 12, and this is the amount you can deduct.

Furthermore, any origination fees, credit card interest, and refinancing your rental property are just some of the other things that can be deducted. These are more complex to deduct, though, and may require the services of a professional accountant.

Deducting Property Taxes

Nearly every state and municipality in the country has some sort of property tax. Depending on where you are, this could be a few hundred dollars a year or a few thousand dollars a year. A quick look online will help you figure out how much you’ll be expected to pay this year. You can also find this out from a tax professional.

If you also happen to live in a state that charges for a license to become a landlord, this is also deductible.

You also need to be aware of states that charge for short-term rentals. These are known as occupancy taxes and strongly resemble state sales taxes.

Also, remember that if you pay sales tax on purchases for your business, Social Security taxes for any employees, or employee salaries, you can also deduct expenses like this on your taxes.

Are You Paying Premiums on Your Insurance Plan?

Some lenders may require that you take out insurance before they’ll authorize the mortgage application. Insurance is a fully tax-deductible expense. This applies to home insurance and other forms of liability and disaster insurance.

If you employ others, you can deduct the cost of their health insurance and their workers’ compensation insurance as well.

Insurance premiums are typically higher for landlords who own rental properties, but the fact that you can deduct those premiums eases the burden somewhat.

You have the additional protection of deducting the cost of damages in the event of theft, floods, earthquakes, and hurricanes.

Tax Deductions for Depreciation

Your property and the contents of that property are naturally going to depreciate over time. In tax terms, this is known as depreciation, which is tax-deductible.

Depreciation can be claimed as a tax-deductible expense from the moment you purchase the property. So you don’t need to have any tenants yet.

You can take this deduction by calculating the expected lifespan of the property. The deduction can then be taken over multiple years.

According to the IRS, take note that land can’t depreciate, so you can only include the property on the land.

You can also add in the value of any equipment you use to manage your rental property. Such equipment may include your work computer and the car you use to move between your properties.

Any improvements to add value or extend the lifespan of your property may also be included. These improvements could include a new roof, new furniture, or purchasing energy-efficient appliances.

The improvement must last for more than a year, offer value to your rental business, and be expected to lose value in time, according to IRS Publication 946.

This is a complex process, so don’t be afraid to call in the help of a professional.

Deducting Maintenance and Repair Costs

Any home improvements you make can be deducted in the form of depreciation. Maintenance and repair costs, though, are also fully deductible. You can add this in separately to further increase the size of your tax deduction.

These costs are only eligible if they keep your property in good condition. They can’t add significant value to your property.

Acceptable expenses would include things like calling in an exterminator, landscape gardening, painting the walls, or fixing a leaky pipe.

If you decide to hire an independent contractor to manage these problems, the labor costs can be deducted. This also applies to any managers you hire to care for your rental property.

If you decide to handle these problems yourself, you can make deductions for equipment and tools.

Under the same rules, you can deduct fees paid to a homeowner’s association or any condo fees.

Can Utilities Be Deducted?

Different landlords will handle the utilities differently. For example, some charge utilities directly to their tenants, while others cover the utilities themselves.

If you’re the type of landlord who covers the utility bills, these payments are tax-deductible.

Smart landlords will pay the utilities and then take the utility fees from their tenants. This is legal, and the deduction can still be claimed without any problems. You will still need to declare the payment from the tenant as income, though.

Professional Fees are Also Tax-Deductible

Landlords have the chance to take specific professional fees as deductions. These can apply to everything from hiring a tax accountant to the cost of the software used to prepare your taxes.

Lawyer fees are fully tax-deductible, as are real estate agent fees. In addition, any advertising fees are fully deductible.

Even landlords who hire advisors can write off the fees paid to those advisors.

In short, any professional fees are classified as operational expenses.

There are some exceptions, though. For example, legal fees used during title disputes and costs to recover properties are not tax-deductible.

Is Travel Tax Deductible?

Professional landlords often have multiple properties. The good news is that you can deduct your travel expenses. This includes travel necessary to show your property to potential tenants and to collect income.

Your regular commutes, on the other hand, are not tax-deductible.

There are two ways in which you can take deductions for travel expenses. You can use the actual expenses or use the standard mileage rate. The standard mileage rate can be found here.

Office Space is Also Deductible

Do you have a dedicated workspace for your business?

Whether it’s a commercial property or a room in your home that you use exclusively for business, you can deduct the associated costs.

The rental costs and the square footage will be your most significant expenses. But anything can be deducted if it’s necessary for running your business, including expenses as small as the cost of printer ink.

Take note. You must maintain accurate records of your purchases. In addition, the home office space deduction is sometimes flagged for auditing, so ensure that you keep as much paperwork as possible.

How Can You Claim Your Tax Deductions?

Online tax filing will help you claim all rental property tax deductions you are eligible for. If you keep accurate records throughout the year, this will be a much easier process than you might think.

The tax deduction process would become more complicated if you used the same rental property as a primary residence at any time during the last tax year. The online software will tell you how many days you can use the home as a residence per year. If you exceed this limit, your tax situation changes.

Oct
13

By

Tax Deductions For Mortgage Refinancing

Category: Deductions Tags: , , , , , , , , ,

mortgage interest tax deduction

The largest tax deduction most people can claim on any mortgage is on the interest paid on the loan.

In most cases, mortgage refinance interest is tax-deductible, which means you can take it off your taxable income for that tax year.

But some rules apply.

Rules for Making Tax Deductions on Mortgage Interest

First of all, the loan must be on either your primary residence or a secondary residence. If you take the deduction on a second residence, this can’t be a rental property.

The loan must be secured against your home. In other words, your home is acting as collateral. As a result, your home will be foreclosed in the event you don’t meet your mortgage repayments.

You’re also only able to claim this tax deduction if you itemize on your taxes. When itemizing, you’re adding every deductible expense individually and then deducting the total amount.

You can’t take this tax deduction if you take the standard deduction, which everyone is entitled to regardless of their circumstances.

Online tax platforms can help you figure out whether you should itemize or take the standard deduction. These tax preparation platforms will add up which deductions you’re eligible for and determine whether the standard deduction is worth more or less.

To do this for the mortgage interest tax deduction, you’ll need to wait for your lender to send you Form 1098, which will tell you how much interest you paid during the last tax year.

Did You Pay by Points?

Some people who refinanced their mortgages may have done this through the points system. Points represent prepaid interest, so you paid upfront in order to get a lower interest rate throughout the duration of your mortgage.

A single point is worth 1% in interest. So if you have three points, your interest rates would go down by 3%. These points may also be referred to as a loan origination fee, a loan discount, a maximum loan charge, or simply by the term discount points.

Points are typically deducted over the lifespan of the loan. When they’re deducted depends on the length of the loan.

Are Settlement Fees Deductible?

In short, no.

When you pay a number of fees and charges after settling your mortgage refinancing agreement, you can’t deduct these payments.

These include but are not limited to: attorney fees, legal fees, and inspection costs.

You can deduct some expenses when refinancing, but these generally don’t apply to residences.

What About Rental Properties?

There are rules on what you can deduct when it comes to refinancing a mortgage for a rental property.

Any rent you receive from tenants is fully taxable as income. But, on the other hand, any money you spent to generate that income can be deducted from the rental income you earned for that tax year.

So you can deduct interest, points, and any closing costs and fees. This is a huge advantage residential property owners don’t have access to when deciding to refinance. It’s bigger than you might think, as closing costs and settlement fees can run into thousands of dollars.

Make sure you don’t lose out this tax year by claiming the mortgage interest tax deduction!

Oct
13

By

What Happens if I Cash Out My 401K?

Category: Tax Tags: , , , , , ,

Planning for your retirement is essential. Most people receive a retirement benefit and advice when they join a large company, but even the most stable working conditions can change. Unexpected costs can tempt you to put your retirement savings on hold in favor of access to quick cash.

401 K retirement planCashing out of your 401k is an incredibly risky choice that should only be made under extreme circumstances.

Whether you’re approaching retirement or simply changing jobs, you have probably considered cashing out your 401(k). Maybe you have, only to be met with a drastically reduced sum that’s been slashed in half (if you’re in the top tax bracket) by tax and withdrawal penalties.

As tempting as it is, cashing out is a massive mistake that as many as 30% of people make before they reach the age of 60.

If you’re thinking about withdrawing the money instead of holding out, then this is the article for you, as we discuss the pros and cons of cashing out your 401(k).

Thinking Ahead: The Long-Term Consequences of a 401k Cash Out

Moving jobs is a tricky time financially. You might have to move cities or adjust your fuel budget to cover a longer commute. There is also a heap of paperwork associated with transferring any retirement funds from one company to another.

It is tempting to cash out your 401(k) when you need capital – it’s even more tempting if you’ve been cut back or are battling against debt. While it might seem like an easy way to access the funds you need, this seemingly small amount is set to get you through the years when you don’t earn a fixed income, and putting this security in jeopardy can be catastrophic.

should you cash in your 401KThe issue is replacing your hard-earned savings. Unlike normal rainy day funds, this is an account designed to cover your retirement. Can you really afford to sacrifice years of savings for a quick fix? The reality is that debt and unexpected costs can make it difficult to save, so raiding the retirement fund is a consideration that shouldn’t be taken lightly.

The reason these savings should be protected at all costs is that they are structured to deliver gradual growth over a significant investment period. They give you the security of compound growth that’s not touched by tax and make it possible to save a substantial amount.

It’s even possible for the earnings from the interest in these accounts to start earning outright, which makes them vastly superior for long-term planning.

The urge to cash out puts this wealth at risk. In fact, studies suggest that the average payout is only $15,000.  Given the time and structure to grow, that amount could comfortably cover the expenses associated with a content retired life.

While it might be acceptable to cash out later in life, it is near-sighted to halt the projected growth of your wealth 25 years too soon. When you consider that an IRA can turn $5,500 into nearly $60,000 by the time you retire, it’s easy to see why experts agree that your 401(k) should stay intact for the duration of your career.

Applying for Relief

Life and finances often take unexpected turns that can turn a comfortable situation into a serious financial hole.

Whether you are moving to a new company and aiming to cover costs or are desperate for cash, the results of raiding your 401(k) are equally negative.

It is advised to take out a loan rather than dip into your savings. If that is not possible, you might be able to apply for a hardship withdrawal.

This is a specific type of transaction that allows you to take a percentage of your 401(k) savings out for personal use. It can be a lifesaver, but again, this is not a decision to be taken lightly. Apart from the fact that you will probably have to pay a 10% penalty, you will also need to pay back the full amount with interest.

This is challenging enough, but the consequences reach further than repayment. For example, the funds you withdraw could grow exponentially if the market spikes, and you will miss that opportunity.

Then there’s the question of repayment if you’re cut back. Your boss might expect you to pay the outstanding amount on your hardship withdrawal, which means you’re faced with a huge, urgent payment yet again.

Punishing Penalties

penalties for cashing our your 401KWhile the long-term effects of cashing out your retirement fund early are enough to make you think twice about taking such a risky choice, there are also more immediate implications.

The first is the 20% penalty you will pay to the IRS, which is taken directly to cover the tax you would pay on the withdrawal. This means that years of saving are wasted in a massive payment to the IRS, which means you get less money out and put your retirement in jeopardy.

Apart from this tax cover, you will be expected to pay both federal and state income taxes, as well as a 10% early withdrawal fee (provided you’re under the age of 59).

Put another way, cashing out your $50,000 401(k) will only put $35,000 in your hand.

Despite this drastic loss, more young people are choosing to cash out early. While they risk an uphill battle to secure their financial future, it often feels like there is no other option available. However, there are a range of options available to people looking to access savings reserved for retirement.

Other Options

There are a few options when it comes to protecting your 401(k). Most are simple to understand and can help you sustain and grow your savings eventually. Although there are different options available, the majority focus on transferring 401(k) savings into IRA structures in a transaction known as a rollover.

IRA Rollovers

Traditional 401k and IRA accounts protect your contributions from tax until you make a withdrawal. You can add to the account tax-free, and only start paying tax when you take money from the fund.

Although every fund has different rules and processes, it’s normally easy to initiate a rollover. This generates a check that is payable directly to your IRA provider, which means you won’t have to pay any tax or penalties.

your 401K next eggThere is also the option of an indirect rollover, where the payout check is paid directly to you. While this gives you more control, it also burdens you with the responsibility of transferring your savings into a tax-advantaged account.

Indirect rollovers are also subject to a mandatory 20% deduction, meaning you need at least 20% of your total savings to put the full 401(k) amount into an IRA.

Failure to make a full payment could mean that the IRS sees the difference between your retirement plan balance and your rollover contribution as a withdrawal, even though they already have the money withheld.  This could lead to further tax penalties.

It’s a tricky process, and one wrong move could see you facing massive penalties. A prime example is the fact that you only have 60 days to move your money into an appropriate account.

The tax-man takes a long, hard look at indirect rollovers, and you will be expected to answer for every detail. Therefore, save yourself the hassle and reduce the risks with a direct rollover – it’s far less risky, and you don’t have to worry about costly oversights.

The Roth IRA

Roth IRA funds offer you tax-free growth and a range of withdrawal options, but once again, if you move your money out of a 401(k) into this type of account, you could face a mammoth tax bill.

Straight of the bat, pretax contributions made to your 401(k) are now subject to tax because they do not enjoy the safety and tax exemption offered by this account structure.

Roth IRAIf you move $100,000 from your 401(k) into a Roth IRA, you instantly lose 25% (if you’re in that tax bracket). That’s $25,000 you owe the taxman. You can pay this out of your pocket to protect your retirement savings, but chances are if you’re considering a transaction of this nature, you do not have that kind of money lying around.

You may ask why people would consider this type of rollover at all. People who expect to face higher taxes once they retire may find it beneficial, but this is rare, particularly if you have a range of accounts growing your wealth as you age.

It’s always best to consult a financial adviser or tax expert to discuss the advantages and disadvantages of a Roth rollover.

Understanding Your 401k Rights

It’s clear that your 401(k) is better left untouched, even when moving to a new company.

Talk to your employer about whether your retirement fund is linked to your employment or not. In many cases, you can leave your savings earned in an active 401(k) even when you move on.

You won’t be able to make the monthly contributions that were deducted from your salary, but the amount accumulated in the account is still protected from tax and will grow.

You might also be able to transfer your existing 401(k) savings into your new employer’s retirement system. This is a simple process that ensures regular contributions, but make sure that you have a good understanding of the new company’s costs, fees, and investment options before you assume that this is the most profitable choice.

Key Considerations

There are 3 core comparisons that you need to make when deciding whether to move your 401(k) savings into an IRA or not.

key considerations for taking money out of 401KThe first is the fees and expenses associated with managing either type of account. You may find that certain plans offer you reduced administration fees or low-cost investment options.

IRA providers charge differently, so compare the overall costs for your planned investment term and not just the annual fees.

Remember, there are management fees, admin fees, broker fees, investment fees, and a variety of hidden costs to consider.

Once you have analyzed the fees associated with each account, you need to consider the spectrum of investment options available. 401(k) plans do not offer much scope for choosing funds based on your risk appetite. IRAs do give you that choice, empowering investors with access to mutual funds as well as securities.

You need to choose the options that gives you what you need in a manageable, affordable way. If you don’t have the expertise to leverage the range of options available from an IRA, it’s best to play it safe.

Lastly, there’s the question of liquidity and investment security. Do you think that you will need access to liquid funds? If so, the flexibility of an IRA might be called for. A 401(k) protects your savings and may offer access to a percentage withdrawal, but again, this has serious consequences as discussed.

Diligence is Important

You need to be responsible and diligent when it comes to maintaining a 401(k). Apart from the fact that you will only reap maximum rewards at the end of a career characterized by patience, you need to keep thorough records.

It is surprisingly easy to forget about a fund after 40 years, and you cannot always rely on a financial services company to keep track for you. Take charge and make sure you’re aware of what’s in the bank. It’s also recommended to assign someone as a backup to your own financial management.

Whether you decide to move your funds or not, the key to securing a stable retirement, from a financial point of view at least, is to protect your savings as much as possible and keep funds in a tax-advantaged account.

Not only will you benefit from compound interest and gradual growth, but you will also avoid the extreme losses brought on by penalties and withdrawal tax.

Ultimately the choice is up to you but choose wisely to avoid a lifetime of financial struggles.

File Your Taxes Online

We recommend filing your taxes online this tax season because of all of the tax benefits that you will receive.

Online tax filing asks you simple questions to fill in the proper form, helps you claim every tax deduction and credit that you qualify for, and you will get the largest refund possible. You never have to know the tax laws or access tax tables during the filing process!

They even have a free tax refund calculator available that allows you to know the amount of money that you will be getting back in your tax refund. Their online filing services have the ability to import your W2 information into your tax return so you can avoid worrying about your forms being delivered via snail mail.

« Older Posts