We Saved Over $1,000 in Taxes This Year By Contributing to Our Vanguard SEP IRA

Vanguard SEP IRA

One of the coolest things I discovered last year in terms of retirement planning was that I have the option to contribute to yet another tax-deferred savings plan – the SEP IRA. What’s even better is that not only was this contribution above and beyond everything I was already saving with my 401k and Roth IRA, but it also accomplished one VERY important task – saving me a boat load of money in the amount of taxes we owed for year on our Federal return. This year the story is even better!  With all the money my online business made, I’m going to end up contributing close to $4,000 this … [Read more...]

Extra Income Taxes – How I Messed Mine Up and What You Can Do to Get It Right

Extra Income Taxes

Even financial bloggers don’t always get everything right. This year I found out there is a dark side to earning a decent amount of passive income.  While making money outside your job is absolutely great, you have to remember that at some point you have to report it all to the IRS.  And that means paying a whole lot of extra income taxes! While the concept of having to paying taxes on your earnings is no secret to anyone, the way you have to go about it is a little bit more complicated than simply waiting until February and then paying in a thousand bucks one time.  In fact because of … [Read more...]

How to Reach an IRS Installment Agreement

How to Reach an IRS Installment Agreement

No one intentionally falls behind on their taxes unless they’re taking cues from Thoreau’s Civil Disobedience (which by the way will hardly work in your defense in court). While Thoreau ended up spending a night in jail and getting some material for his book, most of us would prefer to avoid the penalties imposed for tax delinquency. For those who have found themselves unable to meet their tax requirements with the federal government due to a poor financial situation, one viable solution might be figuring out how to reach an IRS installment agreement.   What is an Installment … [Read more...]

Did I Just Find Another Great Retirement Saving Strategy? Understanding the SEP IRA Rules

Business Man Looking With Magnifier

I think I may have found another good one. A few weeks ago when I laid out my ultimate plan for becoming financially independent, I thought I had really done a pretty good job of optimizing every single angle of my retirement savings options. My 401k.  My IRA.  Is there anything else I’m possibly missing where I could find even MORE tax-deferred savings? Apparently there is! And as it turns out it has a lot to do with this blog.  So all of my blogging friends or people earning any kind of side income may want to listen up …   … [Read more...]

Tax Planning Strategies and How to Avoid Overpaying

Dollar Sign Under Umbrella by digitalart

Over your entire lifetime a considerable amount of your income will be consumed by income tax. Depending on how much you make, you will contribute a higher or lower percentage of everything you earn to the state in accordance with the taxation laws that govern these payments.  If you don't take at least a few minutes to find one of the many tax planning strategies that exist, you could end up with far less of your money than you could otherwise. The taxation system is incredibly complex and it is all too easy to end up paying more tax than you actually have to. Here we take a look at a few … [Read more...]

The Now or Later Tax Refund

Income taxes, tax return, exemptions, savings, 401k

Yea! I got my income taxes done. Any day now I should be expecting both my Federal and State return to direct deposit into my bank account. I’m not getting back as much this year as I had hoped, but it will still be quite a handsome amount. Just like back-to-school signs and Christmas decorations, you can almost pin-point the time from December on when a swarm of tax-filing hysteria starts to show up in our lives. But among the tax software and lists of documents we’re told to dig out of our file cabinets, financial advisors also like to argue one age-old debate: • Should you wait to get … [Read more...]