Sunday, February 20, 2011

Tax Tips for the Unemployed

If it's not enough that you have been unemployed for so long, now you have tax season to make you feel worse.  We all could use a little help sorting out the maze of forms and deductions that need to be kept up on to do our taxes correctly. Courtesy of HRBlock.com they have listed 5 helpful tips to get you started.

1. Unemployment Benefits

  • Expiration alert: all unemployment benefits in 2010 are taxable. In 2009, the first $2,400 in unemployment benefits were tax free — but this benefit has since expired.
  • When claiming your unemployment benefits, you can choose to have 10 percent of your unemployment payment withheld to help pay your federal taxes. You can also withhold your state income taxes.
  • Although withholding is voluntary, it is beneficial because it eliminates the need to make estimated tax payments.
  • Start on tax withholding unemployment payments by filing Form W-4V, Voluntary Withholding Request, with the payer of the unemployment.

2. Job Search Expenses

  • Here's some good news: if you are looking for a new job, you may qualify for a number of tax deductions.
  • These deductions include travel expenses, cost of printing, mailing, and creating a resume, job placement agency expenses, and more.
  • Remember that expenses for a job search in your same line of work are deductible, but you will have to clear several hurdles to reap the benefits.
  • If you itemize, job hunting expenses in your same line of work are considered miscellaneous itemized deductions.
  • Your total miscellaneous deductions must be greater than 2 percent of your adjusted gross income, and only the amount that exceeds the 2 percent “floor” is deductible.

3. Moving Expenses

  • More good news: if you moved for a new job, the expenses associated with that move are deductible, even if you do not itemize.
  • To deduct moving expenses, the new job must be at least 50 miles farther from your old home than the old job was. For example, if you commute 20 miles to your old job, your new job must be at least 70 miles from your previous home.
  • The deductible amount is the unreimbursed cost of moving you and your belongings to the new location.
  • You must stay at the new job at least 39 weeks to qualify for this deduction.

4. Medical Deduction

  • If you aren’t working and are paying COBRA premiums, you should track these and other out of pocket medical expenses as they may qualify for a medical expense deduction.
  • Unreimbursed medical expenses, which include COBRA premiums, prescription drug costs, dental expenses, and more totaling more than 7.5 percent of your adjusted gross income, are deductible.
  • This is one instance where married couples may benefit by filing separately. If one isn't working and has low income/big medical bills, married filing separately may be a good way to go.

5. Health Insurance

  • If you are under 27 years old and do not have access to employer-provided insurance, you may be added to your parents' health insurance policies starting in 2011. This benefit is not taxable.



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Saturday, February 19, 2011

Tips To Help You Talk Money To Your Sweetheart

...And Then Sometimes Valentine's Day Sucks!Image by Sister72 via Flickr


This past Valentines Day just brought out the best side of me. When my wife and I talk about money these days it's good to know it won't turn into a knock down drag out fight like it used to. We have learned to talk calmly about money and practically know how the other will respond in any situation..

During are early years of marriage money was very tight. We were combining families and lives. It wasn't easy because most of our fights were about money. We both came from different experiences with money. Our families handled money differently. We had to get used to each other and also our spending-saving habits.

I found that the number one thing to solving money issues was communication. We had to check our baggage at the door and talk openly about the reasons for our differences. We had to be careful not to be hurtful and try to resolve little issues before they festered into big ones. Having those smaller open discussions headed off the potentially bigger ones down the line.

With so many differences we had to find common ground. We tried not to dwell on our past experiences but we set goals and figured ways to arrive at them. It wasn't easy but we kept trying. There was some times when the wheels came off the wagon. But with time and patience we persisted.

We found out early that if we didn't do the math and have a game plan but just relied on our talks we would fail. Putting your goals in writing, setting up a spending plan and tracking actual household income and expenses was imperative to success.

When discussing all this financial stuff we had to methodical and not emotional think about what we we're doing and planning to do. We came together and didn't have a chance to stay together unless we were methodical about our plans.

Sometimes you have to lose a battle, to win a war. Each of us had to give up entrenched ideas and beliefs for the common good. This is very hard to do. Giving up habits that you know are good, but for the greater goals of the marriage, we had to agree to disagree.

Lastly we sought out professional help. Not a psychiatrist, because it feels that way now and then, but a financial expert. They will show you the things you overlooked and things to do, to make your plans happen.

Marriage poses many challenges. Sharing money decisions, in a caring way, will only strengthen your marriage. Not working together may cause your marriage to dissolve. Giving your trust to another is a big step. You trust your spouse with your heart, why not your money?

Reader, what situations cause money fights in your home? Or are you past that ?


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Friday, February 18, 2011

5 Tax Benefits For Students

Happy StudentImage by tilitran via Flickr
With college being so expensive you need all the help you can get to save a little money. Our friends over at HRBlock.com have given us 5 tips that apply to the student or the one paying for the students education. 

  • American Opportunity Credit: Up to $2,500 in 2010 for qualified education expenses will be paid to each eligible student who is enrolled part-time or full-time. You can claim the credit only for the first four years of higher education, but it doesn't apply to private secondary school or graduate school. This credit is 40 percent refundable and up to $1,000 may be refunded to the taxpayer even if there is no tax liability.
  • Lifetime Learning Credit: You can receive up to $2,000 for qualified education expenses. You can claim this credit only once per return, but there is no limit on the number of years you can claim the credit. You're eligible for this if you're a student who takes one or more courses. Qualified expenses for the Lifetime Learning Credit include the cost of courses that aren't part of a degree or certificate program. So if you work and take occasional courses to strengthen your job skills, you are eligible for this credit.
  • Tuition and Fees Deduction: You may be eligible for up to 100 percent of qualified higher education expenses with a maximum of either $4,000 or $2,000, depending on the taxpayer's filing status and income level. Like the Lifetime Learning Credit, there is no course load requirement or limit on the number of years the deduction can be taken.
  • Student Loan Interest Deduction: If you are paying back student loans used to pay for higher education, you may be eligible to deduct up to $2,500 per return for every year.
  • Employer-provided Educational Assistance: If you received educational assistance benefits from your employer you can exclude up to $5,250 of those benefits each year.
Our tax returns are becoming more complicated every year. If you have any doubt to your ability to complete them correctly be sure to hire a competent tax preparer. They always seem to find those pesky deductions we miss. They may be able to keep a little more coin in your pocket and less in Uncle Sam's.
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Thursday, February 17, 2011

US Healthcare System Is "Evil," Says Justin Bieber

NYC signing September 1,2009 Nintendo Store - NYCImage via Wikipedia
When I think of words to describe the U.S. Healthcare system, the word "evil" has never entered my mind. But to our young friend Justin Bieber, it's evil. Recently, I don't know how this could come up, but Justin Bieber commented on the U.S. Healthcare System. Here's what he told the Rolling Stone magazine when asked if he would switch from being Canadian to a US citizen. Bieber says:

"You guys are evil. Canada's the best country in the world. We go to the doctor and we don't need to worry about paying him, but here, your whole life, you're broke because of medical bills. My bodyguard's baby was premature, and now he has to pay for it. In Canada, if your baby's premature, he stays in the hospital as long as he needs to, and then you go home."

Even though he is only 16 years old he does have his opinions. I did not know he was a Canadian. He has grown up in a country that has socialized medicine. He believes it is a good thing. Lets remember that because of his youth he has a very limited knowledge of finances and paying your own way. Also remember he is being sympathetic to his body guards situation. He is coming from a good heart.

By his comments, I believe he is not that involved with his personal finances. Someday when he is old enough to take an interest in his tax returns, he may think differently. His future looks bright, with music, TV and movies in his future. He will be making obscene amounts of money and paying obscene amounts of tax. He may wonder when that day comes where his money is going to. That day hopefully he'll put 2 and 2 together and realize that his Canadian Healthcare System is not so free anymore.


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Wednesday, February 16, 2011

Your Budget Will Always Fail If You Don't Have This One Ingredient



Budgeting is the backbone of your financial plan. It's a spending plan that tells your money where to go every month. We all have various reasons to have a spending plan. It can be saving for retirement, getting out of debt or saving for a house or car.

The fuel to make this plan come all together is your income. Budgeting your income channels the money to a future purpose. Now a days money is at a premium, people have lost jobs and income is reduced. On the other hand expenses are going up. My insurance, property taxes, and consumables have all risen sharply in the last few years. The spending plan is tighter than ever.


How To: Create A Budget



The problem is that you don't have the money to save anymore. Your just making the bills and this is the worst time to put money into retirement or paying off debt. In my own situation, my health care used to be paid for at my business. Now the money just isn't their anymore. It now comes out of my income every month. Like me, many others have incomes reduced or eliminated causing a drastic cut back in lifestyle and spending.

The cure for all this is to find other channels of income. Whether it's a part time job or a home based business. If you are thinking you already work 6 or 7 days a week now, how can I work more? You will have to find the way that works in your life. This is not going to be easy. If your fluent in computers build a website and sell something. Have a garage sale on Ebay.

Budgets: Hold Your Nose and Try One

If computers are not your thing then, find a way to use your job specific knowledge and do what you do at work for clients. Starting a business at home will have low start up costs and it lets you test the waters cheaply to see if your idea will fly.

You need the increased income to jump start your goals. We all need to do something on the side. It may grow into to something substantial, it may flounder, or it may make you some money that will give you an income, that will take you into retirement. Don't just sit there in front of the TV complaining. Shut off "Biggest Loser" and make yourself the biggest winner.

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Tuesday, February 15, 2011

Is It Fair Baby Boomers Are Getting Blamed For Everything These Days


Image via Wikipedia


If you are of the Baby Boomer generation are you to blame for the Social Security and health care problems? I am seeing in the news more and more how the Boomer's are beginning to be used as the scape goat for the nations problems. The trends are starting to show that the shear number of Baby Boomers will effect the economy and jobs in this country for the next 30 years. In many ways they will be blamed for the future economic woes of this country.

The boomer's are getting blamed that, as they age, they will be using more than their share of medical resources. They will be the generation that will enjoy the best of the medical benefits this country has to offer. They will be living longer than any generation has ever in this country. Their longevity will cause Medicare to become insoluble.

Social Security is teetering on bankruptcy more and more every year. Guess who will be blamed for pushing it over the edge. Boomer's, with their state of the art medical care will have extended life spans that will allow them to receive benefits much longer than the system was built to sustain. The X and Y generations will have to foot the bill for their longer lives. Not only that the X and Y's will have to be paying more in to support their eventual retirement. They are not going to like that.


Enjoying a longer life span comes with a need to work longer. The bulk of Boomer's are ill equipped for retirement. You will see retirees keeping their jobs longer, not passing their businesses on to their children because they need money to live. Boomer's will be seen everywhere. We will have a gray army of workers bagging groceries, doing office work and working in McDonald's. The X and Y's are not going to like the Boomer's taking jobs, they may need or want.

The first Boomer's are the children of the "Greatest Generation", the generation that saw the end of World War 2 and the greatest rise in the economy this country has ever known. Their progeny will rewrite the book on retirement, aging and end of life issues for future generations. The first Boomer's are turning 65 this year, with 76 million of them, it's just beginning


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