Financial Planning on the other hand is on a larger scale and includes everything from investment planning, savings, expenditure to paying of debts and bills. Here what you plan affects you other areas of financial concerns.

On a general man to man basis Financial Planning is of more importance when compared to investment planning. If a man fails to save money, then where is he going to make the investment from? It is here that the need to emphasize on a strong financial plan comes to play. Financial planning is on a larger scale compared to Investment planning. Where investment planning is individual oriented, financial planning takes into account the needs of the individual and family. Financial planning is the process of assessing the financial goals of an individual at different junctures of his life. It takes into account all assets and investments that he already has and what others he may require to achieve his financial goals in the near future. The prime objective here is to ensure that the required amount of money is there with him at the time of an investment, thereby enabling him to meet his personal goals. This is how financial planning and investment planning relate to each other. Coming to the investment part, security along with profit is a big question?

Any investment depicts a clear picture of your current financial situation. Bifurcate your investments amongst various assets to reduce the risk factor. Asset Allocation is the best way to ensure that a particular investment made is a success. Monitoring your investment to maintain the allocation with your financial goals makes the investment tax efficient.

Following are certain points as to how one can better their investment and financial planning:

Investment Planning:

1) Create a Budget for Monthly Expenses: This enables you to get a clear picture as to where your expenses lie and how much unnecessary expenditure you could curtail to save a decent percentage of your income.

2) Paying of Debts: Once you clear of your debts, a certain amount of your expenditure is saved. This can be used for investment purposes.

3) Emergency Savings: Emergencies do arrive unannounced. One has to ensure that a

certain amount is kept aside to meet these situations. These funds should be invested or

kept aside to meet these situations. These funds should be invested or kept aside in

investments that can be accessed anytime you need cash.

4) Investing in Long term Assets: Investing in long term Assets is a good decision. Purchasing a house is considered to be a good investment as payments towards interest and real estate taxes are tax deductible. Secondly the value of property increases with time. Other then this investing wisely in Mutual Funds, stocks and insurance will provide you with a good return on your investment.

Financial Planning:

1) Using a monthly spending plan or budget to keep finances on track

2) Making decisions about the job and its benefits

3) Getting the most out of other financial resources, including insurance and employer provided benefits.

4) Saving and investing money

5) Controlling expenses and staying out of debt.

6) Planning for estate transfer.

Generally people enlist the services of a financial planner prior to making any major investments. A financial planner is a professional who helps people deal with various personal financial issues through proper planning, which includes cash flow management, education planning, retirement planning, investment planning, risk management and insurance planning, tax planning, estate planning and business succession planning. While dealing with Mutual Fund Investments they are called “Fund Managers” and it is them who determine the performance of a fund. Investment and financial planning if made wisely definitely guarantees you security and long term financial gains and keeps you financially independent through out your life.

It is not always necessary to pay for the services of a financial planner. Saving via superannuation these days is relatively straightforward and easy. Another time when the advice of a financial planner could be necessary is just before retiring. At this time you’ll be looking to reduce your tax burden. Super payouts are tax-free once you reach 60 years of age, so adding any extra to that super fund is a wise move. A financial planner can help you work out what’s is best for you both now and in the future.  The time when the services of a financial planner may be necessary would be when you have a larger amount of money to invest, such as if you have recently taken redundancy or received money from another source.

When you have lots of money in the bank, it can be very tempting to rush out and buy the car you’ve always dreamt of owning, or arrange to have that pool you always wanted installed, but if you need that money to live on in later years, then getting advice would be a wiser option.

Another time when the advice of a financial planner could be necessary is just before retiring. At this time you’ll be looking to reduce your tax burden. When you have lots of money in the bank, it can be very tempting to rush out and buy the car you’ve always dreamt of owning, or arrange to have that pool you always wanted installed, but if you need that money to live on in later years, then getting advice would be a wiser option. Super payouts are tax-free once you reach 60 years of age, so adding any extra to that super fund is a wise move.

A financial planner can help you work out what’s is best for you both now and in the future. By typing your postcode into the Financial Planners website www.fpa.asn.au you’ll get the names of financial planners near you.

In today world of economic turmoil it is becoming increasingly important to look at all aspects of your financial planning. The changes that have taken place of the last two years have been earth shattering for many seniors who thought they had everything covered. If you or anyone you know is having a hard time financially or you have seen savings and or retirement funds disappearing you need to think about the future.

There is one thing that we know for sure even with the best of plans is that change will come for everyone. There is no such thing as the perfect plan, but there things we can do to avoid some of the unforeseen issues that can affect each and every senior no matter how good the plan. Over the last few years many of financial planners, CPA’s and Elder Attorney’s are looking towards the Reverse Mortgage as one of the key components of planning for the future.

Just because a senior does a Reverse Mortgage; does not mean they cannot plan for the future, with all of the options that are available under the program. In planning you need to have a direction with security features built into the plan. By utilizing the proceeds of the RM in certain ways such as having a portion of the monies stay in the Credit Line which grows over time with interest at a ½ percent over the interest charged on the balance.

Here are some examples you can use as a guide

Tenure: This means receiving an amount of money every month for the rest of your life! (It is calculated on living 100 years.)
Term: This is for a specific amount of time usually 10 years
Lump Sum: This is where you take all of the proceeds at closing
Credit Line: This is setting up an equity line of credit that earns interest that you can draw from when needed. (Key here is that no interest is charged on this money until you actual take it out)

The most important part to remember is that any of these terms can be changed at anytime except if you take all the money at one time. Of course there would be none left.

Here is where planning comes into to play, you have a specific amount of money at closing of the Reverse Mortgage, now you need to determine what level of security you are looking for and when you may need funds. Are you planning on giving money to your children/grandchildren, are you looking to purchase long term care insurance for the future. These of course are only a few issues that you may be faced with down the road, of course there are also day to day issues like property tax increases, insurance, medicines and food just to name a few.

The fact is a Reverse Mortgage is a edge against deflation as well as inflation simply because it allows you to have funds that are totally protected and insured should you ever need them. Your home was something that you purchased a longtime ago in most cases at a reduced price, you paid for it over time with a mortgage which you were charged interest for however many years you took. You also received tax benefits along the way with interest deductions and tax deduction. At the time you purchased your home in many cases you did not even think that you home was being and invest in time.

Let’s look at this closely.

You purchase your home in 1965 at let’s say $30,000

Over 30 years you made payments on the home every month and paid it off in 1995

If you had and interest rate of 5% you paid to the mortgage company over that time $28,000.00 in interest alone, which means you paid $58,000 for you home. Now over the years your home had what is called appreciation so let’s assume over 30 years it averaged 5% per year. Now remember this appreciation is compounded every year. So let’s look at this.

$30,000 purchase price

5 % appreciation over 30 years $129,658.27 this is an average.

With the markets over the years your home today could be worth $200,000

So now look at the Reverse Mortgage for a person at age 65 with zero owed on there home.

$200,000 appraised value

65 Years of Age

$127,000 in funds available before cost of the loan, net proceeds would be estimated at $114,000 tax free money.

So what this means is that if you had purchased your home and had received the national average of 5% appreciation without all of the crazy numbers over the last decade you would be able to draw out every dime you paid for your home including all the interest you paid over the years. Plus you will have the profits that you would only get if you sold tax free and never have to pay anyone for the ret of your lives. This is truly a hedge against inflation and deflation.Think Reverse!

Mistakenly viewed primarily as playgrounds of the ultra-rich, vehicles for tax evasion and shelters of the proceeds of criminal activity, the 40 some territories around the globe that are considered tax havens have been receiving some unwelcome attention lately.

It has, in fact, been a rough past year or so for the world’s low-tax and offshore centers. They are finding themselves increasingly in the crosshairs of the cash-strapped G-20 and the Organisation for Economic Co-operation and Development (OECD), a Paris-based bureaucracy run by high-tax nations such as the United States, UK, Germany and France.

Desperate to prop up their ailing economies, these countries are aggressively seeking to replace some of the trillions in taxpayer money that been used for stimulus packages and handed over to corporate interests in the form of bailouts.

In the latest escalation of the war on fiscal shelters, in their zeal to track down wealthy tax evaders, industrialized nations are intent on shredding privacy laws the world over. Half a dozen countries from Switzerland to Hong Kong have already caved to international pressure and threats of sanctions, agreeing to lift the veils of secrecy that have shrouded them for decades, and in some cases, centuries.

The momentum against tax havens started picking up speed last year thanks to U.S. Senator Carl Levin, a long-time foe of offshore tax havens, who insists they deprive government coffers of $100 billion in annual revenues and says “Tax havens are engaged in economic warfare against the United States and honest, hard-working Americans”-some argue that high total U.S. tax burden, which wipes out about half of most Americans’ incomes, is economic warfare. The U.S. Congress last March began zeroing in on Swiss bank secrecy after UBS admitted helping American clients conceal assets from the government. The OECD recently blacklisted Switzerland and a number of other countries and jurisdictions because they “do not furnish banking information to tax authorities of other countries within the framework of income tax evasion.”

The truth is this political effort is not so much about snaring tax cheats as it is about the bigger picture: the long-term goal of destroying tax havens. Why? The answer is simple: tax-happy nations fear fiscal havens because they promote tax competition, financial privacy and fiscal sovereignty, all of which limit the ability of governments to act as monopolies.

Even with the stepped up efforts of their opponents, all is not lost. The growing coalition of world leaders may be softening some tax havens´ traditional codes of silence, causing the pillars of secrecy surrounding financial transactions to crumble, but most who use these sanctuaries to privately safeguard their assets, run their businesses and protect themselves and future generations have little to worry about (unless they happen to be on one of the clients lists that are being handed over to authorities).

So, is this the beginning of the end for tax havens. The short answer is no. Despite the current onslaught, these financial fortresses will continue to play a critical role in global finance for the foreseeable future. Besides, for those with real concerns about the security of their assets and holdings, there are many other privacy-conscious and tax-friendly places that manage to fly under the radar of financial watchdogs, providing the perks of tax havens without the scrutiny.

What is tax fraud, and how does our government control it? That’s a really big question to answer, so let’s break it apart and answer it in two different paragraphs. Tax fraud is the intentional avoidance of tax due by a taxpayer, corporation, or other legal entity. There is a vast difference between the opportunity to minimize your tax liability and the direct avoidance of any responsibility. The tax laws and regulations of the Internal Revenue Service are there for the benefit of the taxpayer. If there is a way to reduce or minimize the amount of tax due, legally, by all means citizens are encouraged to take the break. There are all sorts of ways to commit tax fraud, and many famous cases have been tried, such as Al Capone and Willy Nelson.

When, as a taxpayer, you seek whatever legal means possible to avoid tax liability, you are guilty of no crime. It is your given right to seek a means to minimize your liability, in order to keep more of your money. However, when companies, individuals, or any other legal entities attempt to avoid their legal responsibility, we as a country suffer. The government operates on tax dollars. Tax dollars that everyone who has been deemed liable must provide, and if not provided, penalizes everyone.

Tax fraud has been a part of society for as long as there have been societies. Even during Roman rule, there were tax collectors, and individuals who evaded their payment of taxes. This country was founded on the precept that England charged an unfair tax on tea (and other various assorted sundry) to the point that the colonists were unfairly taxed, without a voice in the government. The Internal Revenue Service is charged with overseeing the regulation and prosecution of any person or entity that avoids payment of taxes due, and can assess penalties for those who succeed.

What tools does the Internal Revenue Service (IRS) use to control tax fraud? There are actually several means by which the IRS can control tax fraud, once they discover the crime has been committed. How do they detect tax fraud? The IRS has some 2800 special agents that are trained to gather information that is used to detect tax fraud; they have unlimited access to tax returns, the power to issue summons regarding needed financial information, and the right to seize or freeze monies in the attempt to collect the necessary financial information.

Once the tax fraud has been detected, the Internal Revenue Service can levy tax liens, seize assets, freeze money in checking and savings accounts, and garnish wages. Any and all properties held by the individual taxpayer can be seized, and sold at auction if no attempt is made to repay the liability. Everyone that is determined to be involved in an evasive or fraudulent act of tax liability has the opportunity to be heard, to meet with the Internal Revenue Service, and receive a trial to determine if the accused party is guilty. It is generally in the individual’s best interest to settle with the Internal Revenue Service if there is any possible doubt as to their innocence.

That’s not to say that the Internal Revenue Service has always played fairly, or that they are free from mistakes. This is not so. There have been many instances of improper intelligence access, and errors on the part of the Internal Revenue. But, in the majority of cases, the tax fraud accusation was legitimate, and the individual charged was guilty. Many individual taxpayers rely on accountants and business managers to handle their financial affairs; in fact, many are not even aware of the status of their finances. It is however, ultimately, the individual taxpayer’s responsibility to be held accountable for the information provided to the Internal Revenue Service. So, if you’re going to be the one in front of the Internal Revenue, you should do yourself a favor and examine your return, understand what you’re reading, and check the return for accuracy.

I Am My Daddy’s Tax Deduction

I know my daddy loves me but he seems much happier with me during income tax time. A whole year of taking care of me yields some sort of tax windfall as long as my daddy’s adjusted gross income is not too high and he is not in the alternative minimum tax. The one thing I have learned by being the daughter of a public accountant practicing tax is that you get your tax benefits as soon as you are able. Money received today is much better than money received tomorrow.

I do love my daughter and I am very proud to hear her say these words. It is absolutely true that is always better to get money today as opposed to waiting for tomorrow. If we are in receipt of funds today, we can make investments, put more money in our 401K’s, pay extra on our mortgages, and take care of our current life styles without running up debt and finance charges. What is really being said here is take advantage of your income tax benefits today. Do not wait until year end; do not run up credit card debt to make ends meet just to get a big tax refund. Have use of your money this very day and begin planning for your future. Here’s how you can take advantage of your income tax benefits today:

Husband and wife with two kids 4 exemptions

Mortgage interest ($24,000-10,300 standard deduction) 4 exemptions

Real estate taxes ($4,000) 1 exemption

State income taxes ($7,000) 2 exemptions

Contributions ($10,000) 3 exemptions

In this scenario, husband works and wife has no income. The standard deduction for married individuals filing a joint return is $10,300 which is already factored into the income tax withholding tables used by your employers. This amount was subtracted from the mortgage interest expense but could have been deducted from the total to arrive at the same result. The personal exemption amount used in this calculation was $3,300 with exemptions rounded to the nearest ones place. Assuming that this family is in the 25% bracket for federal purposes, the extra 10 exemptions will save $8,250 annually. This would breakdown to $688 more each month. Imagine the difference this would have in your monthly budget. If this money were invested each month or used to pay down some of the outstanding mortgage balance, the economic benefit will go well beyond this tax savings. The power of compounding interest will turn this monthly benefit into a much bigger economic gain.

Please my friends, my daughter and I urge you to calculate your income tax benefits for 2007 and beyond. Please take advantage of your benefits today to secure a more advanced economic well being tomorrow. Remember, if both spouses work, the subtraction will have to be $20,600 as both spouses will have this standard deduction built in to their respective withholding tables. If you are in the alternative minimum tax, please do not take into consideration your real estate taxes, personal property taxes, and income taxes.

Ron Piner, CPA

Host of “Better Business”

Saturday Mornings at 10ET

On WBIS AM 1190

www.wbis1190.com

www.mwibonline.com

Financial freedom no matter how much money you make!

You do not need to be rich to achieve financial freedom. Financial freedom is simply living debt free and organizing your money so that when the bills are due, you have the money set aside to pay them.

About two years ago I realize that each and every month I was going a little further into debt. I decided it was about time to do something about it, so I went to a financial seminar sponsored by my local church. This seminar was pretty much what I expected, they reviewed basic principles for handling money properly, avoiding credit cards, being careful when purchasing a vehicle, and living on a budget.

The approach that was used when discussing the budget topic is what changed my financial life forever. The word “budget” has such a negative connotation for most people that it is an instant turnoff.

Most people believe that a budget is for people who don’t have much money, and it also tends to make people feel restricted in their spending. Nothing could be further from the truth!

A budget is simply a spending plan. Most people like to spend money, so let’s use the word “spending plan” and leave the word “budget” behind us.

A properly used spending plan will provide a person or family (with even a modest income) a true sense of financial freedom. I am experiencing an awesome sense of freedom myself since I have put my own spending plan into place about two years ago.

What I am talking about is this sense of freedom that you get when the mortgage comes due and you have the money already set aside; when the kids have to go back to school shopping and the money is there waiting; when you go grocery shopping each week and you know exactly how much money you can afford to spend because the money is already set aside!

When we took one of our cars in for inspection, we were told that it needed new tires. No problem! I had an automobile maintenance fund set aside and we had just enough money to cover not only the inspection, but a nice new set of high-quality tires, all because we implemented a spending plan with the help of some very powerful, yet easy to use software!

I cannot tell you what a wonderful feeling it is to have money set aside for just about anything and everything that comes up!

An effective spending plan can be created by simply looking at the money you have spent over the past year or so and getting an estimate as to how much money you spend in each area of your life. Then looking at your income and getting an idea of how much money you would need to put aside for each category for the coming year. If you have not been keeping track of where your money goes, simply start now by keeping a general record of where you spend your money.

This article will not go into too much detail about how to do this, but I will give you an overview.

Sit down with your checkbook and make a list of all things you spend money on. Then create 10-15 categories that all those expenses would fit into.

An example would be:

Housing (mortgage, utilities, repairs, insurance, furnishings, etc.)

Automobile (payments, gasoline, maintenance, insurance, etc.)

Food (weekly groceries)

Entertainment (dining out, movies, golf outings, etc.)

Savings (investments, savings accounts, college fund, etc.)

Vacation (ALL vacation expenses including travel, dog sitter, etc.)

Debt (credit cards, loans)

Miscellaneous (pretty much anything that does not fall directly under any other category)

Charitable donations (tithing, other tax-deductible donations)

Christmas (nothing is more awesome than not having to worry about how you’re going to pay for all those gifts!)

Once you have listed all your expected expenses into one of the categories, you’ll have to figure out how much money from each paycheck you need to put toward each category. For each category you’ll have an envelope.

Right about now you are probably thinking, “Is this guy nuts? Nobody uses cash anymore, and nobody keeps cash in envelopes!” This is where software comes into play. There are software programs available that will enable you to have “virtual” envelopes to keep track of your money, which is safely tucked away in your checking and savings accounts. I am not talking about a simple Excel spreadsheet or anything of that sort, I’m talking about extremely powerful software (much better than MS Money or Quicken) that can generate reports, track all of your expenses,pay your bills online in seconds, make tax time a breeze, automatically place the proper amount of money in each envelope, and get you on the highway to financial freedom.

It is probably best start out with a relatively small number of categories. As you become familiar with your spending plan you can expand the number of categories. For example you may want your housing category to include all the monthly bills associated with your home, or you may want to have a separate category for mortgage payments, utilities, homeowners insurance, taxes, etc. You may want to add more categories such as taxes, birthday parties, medical bills, hobbies, allowances, unexpected expenses, etc..

It may take a little bit of time to set up your spending plan, but once it is set up, it takes very little effort to keep it in place. You won’t do it perfectly the first time, you will have to make adjustments as time goes on because unless you are extremely lucky, you’ll find out you had too much money set aside in some categories and too little in others. You can always change your spending plan as your situation changes, your income changes, or your spending categories change.

This may sound like a lot of work, but the concept is simple, and the software will guide you through step by step. Very soon, you will have total control of your money, and will know what true financial freedom feels like!

11 Year End Tax Savings Tips

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Home Page Finance 11 Year End Tax Savings Tips
11 Year End Tax Savings Tips

Posted: Dec 5th, 2007 | Comments: 0 | Views: 149 |

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11 Year End Tax Savings TipsAuthor: Kent Irwin

This time of year, now through the first quarter of next year, you will see articles offering year-end tax planning tips. Tax planning tips can increase income in future years, so be careful. Many tax tips often involve accelerating deductions, deferring income, or last-minute charitable deductions (the first three following tips).

For example you may be compelled to make a large charitable contribution this year by December 31st. However if you could be in a higher tax bracket next year because your income is going up because of a substantial raise or bonus, you would have been better off to make the contribution next year. Some may say this is heartless, but I say just the reverse. If you pay less in taxes because of good planning, your will be better off financially and able to give more in the future.

If you have volatile income, before you use the tax savings tips here and in other articles, you may want to run projections for this year and next. A good accountant will run these calculations for you, but understand that tax law changes from year to year and from one administration to the next can often make predicting tricky.

1. Defer income

If you are able to defer income, such as commissions and bonuses until next year, you might be able to pay lower income taxes this year. However, you must consider what your income and taxes will be next year to be sure that you are not actually increasing your taxes.

2. Accelerating deductions

Accelerating major deductions such as state income taxes, property taxes, and mortgage interest may help anyone, especially during a high-income year. If you don’t think your personal income tax bracket will be higher next year, and you’re not affected by the alternative minimum tax, you can make state and/or local tax payments before the end of this year so you can take a deduction this year.

3. Charitable Contributions

Consider making chartable deductions before the end of the year to receive a deduction. You must make the contribution by 12/31/2007.

Donate appreciated property such as real estate or stock instead of the proceeds of the sale. You may be able to receive a deduction for the value of the contribution without paying tax on the growth portion resulting from a sale, then a gift. If you intend to transfer appreciated property, begin early since it will take several weeks to make the change.

4. Alternative minimum tax traps

Many people face large AMT bills compared to previous years. Be warned if you have larger than usual medical expenses, non-federal income and real estate taxes, or miscellaneous itemized deductions; or if you have exercised large stock options, to name a few.

Year-end tax planning strategies can backfire under AMT. Be very careful accelerating some deductions and exercising stock options at year end. See a tax professional for information on your specific tax situation.

5. Be careful when investing new money in mutual funds at the end of the year

Call the mutual fund and find out when the distribution date is. You may want to purchase after the distribution date to avoid owing taxes on fund shares that you owned only for a short period of time and had little to no gain.

6. Contribute the maximum to retirement accounts

Contribute the maximum allowable to employer-sponsored defined contribution retirement plans, such as profit sharing, 401(k), 403(b) and 457(b) plans. This not only provides an excellent tax deduction, but it also helps you to plan for your future retirement.

You may want to contribute to an IRA; up to $2,000 is fully deductible if you did not participate in a company-sponsored retirement plan or if your income falls below certain levels.

If you are self-employed, you can contribute more to a pension plan than into an IRA. You have until December 31 to set up the plan.

7. Investment Losses

If your investment portfolio has stock that has depreciated in value and is worth less than when you originally purchased it, you may want to consider selling it. You may be able to use that loss to offset capital gains and ordinary income.

Be careful though; investment decisions should not just be for tax purposes. Make sure that you do your research before selling any investment. Some people react too quickly when investments lose value; others sometimes hold on too long. If you decide to sell and invest in something new, make sure that you examine your portfolio to ensure that you have the right mix of investments to match your investment profile, risk propensity and asset allocation model.

8. Save for College

Consider contributing to your child’s college savings into a 529 plan. The contributions are not deductible on your Federal return, but parents may be able to write off contributions up to a certain dollar amount on their state income tax return. Log on to SavingforCollege.com to find out information about your state.

9. Home Improvements

Here is a great deal. How about saving energy and the environment, lower utility bills, increase the value of your home and save on taxes

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Home Page Finance 11 Year End Tax Savings Tips

11 Year End Tax Savings Tips

Posted: Dec 5th, 2007 | Comments: 0 | Views: 149 |

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<br /> <h1>11 Year End Tax Savings Tips</h1> <p><strong>Author: <a title="Kent Irwin" href="http://www.articlesbase.com/authors/kent-irwin/32814.htm">Kent Irwin</a></strong> <p>This time of year, now through the first quarter of next year, you will see articles offering year-end tax planning tips. Tax planning tips can increase income in future years, so be careful. Many tax tips often involve accelerating deductions, deferring income, or last-minute charitable deductions (the first three following tips).</p> <p> </p> <p>For example you may be compelled to make a large charitable contribution this year by December 31st. However if you could be in a higher tax bracket next year because your income is going up because of a substantial raise or bonus, you would have been better off to make the contribution next year. Some may say this is heartless, but I say just the reverse. If you pay less in taxes because of good planning, your will be better off financially and able to give more in the future.</p> <p> </p> <p>If you have volatile income, before you use the tax savings tips here and in other articles, you may want to run projections for this year and next. A good accountant will run these calculations for you, but understand that tax law changes from year to year and from one administration to the next can often make predicting tricky.</p> <p> </p> <p>1. Defer income<br /> </p> <p>If you are able to defer income, such as commissions and bonuses until next year, you might be able to pay lower income taxes this year. However, you must consider what your income and taxes will be next year to be sure that you are not actually increasing your taxes.</p> <p> </p> <p>2. Accelerating deductions<br /> </p> <p>Accelerating major deductions such as state income taxes, property taxes, and mortgage interest may help anyone, especially during a high-income year. If you don’t think your personal income tax bracket will be higher next year, and you’re not affected by the alternative minimum tax, you can make state and/or local tax payments before the end of this year so you can take a deduction this year.</p> <p> </p> <p>3. Charitable Contributions<br /> </p> <p>Consider making chartable deductions before the end of the year to receive a deduction. You must make the contribution by 12/31/2007.</p> <p> </p> <p>Donate appreciated property such as real estate or stock instead of the proceeds of the sale. You may be able to receive a deduction for the value of the contribution without paying tax on the growth portion resulting from a sale, then a gift. If you intend to transfer appreciated property, begin early since it will take several weeks to make the change.</p> <p> </p> <p>4. Alternative minimum tax traps<br /> </p> <p>Many people face large AMT bills compared to previous years. Be warned if you have larger than usual medical expenses, non-federal income and real estate taxes, or miscellaneous itemized deductions; or if you have exercised large stock options, to name a few.</p> <p> </p> <p>Year-end tax planning strategies can backfire under AMT. Be very careful accelerating some deductions and exercising stock options at year end. See a tax professional for information on your specific tax situation.</p> <p> </p> <p>5. Be careful when investing new money in mutual funds at the end of the year<br /> </p> <p>Call the mutual fund and find out when the distribution date is. You may want to purchase after the distribution date to avoid owing taxes on fund shares that you owned only for a short period of time and had little to no gain.</p> <p> </p> <p>6. Contribute the maximum to retirement accounts<br /> </p> <p>Contribute the maximum allowable to employer-sponsored defined contribution retirement plans, such as profit sharing, 401(k), 403(b) and 457(b) plans. This not only provides an excellent tax deduction, but it also helps you to plan for your future retirement.</p> <p> </p> <p>You may want to contribute to an IRA; up to $2,000 is fully deductible if you did not participate in a company-sponsored retirement plan or if your income falls below certain levels.</p> <p> </p> <p>If you are self-employed, you can contribute more to a pension plan than into an IRA. You have until December 31 to set up the plan.</p> <p> </p> <p>7. Investment Losses<br /> </p> <p>If your investment portfolio has stock that has depreciated in value and is worth less than when you originally purchased it, you may want to consider selling it. You may be able to use that loss to offset capital gains and ordinary income.</p> <p> </p> <p>Be careful though; investment decisions should not just be for tax purposes. Make sure that you do your research before selling any investment. Some people react too quickly when investments lose value; others sometimes hold on too long. If you decide to sell and invest in something new, make sure that you examine your portfolio to ensure that you have the right mix of investments to match your investment profile, risk propensity and asset allocation model.</p> <p> </p> <p>8. Save for College<br /> </p> <p>Consider contributing to your child’s college savings into a 529 plan. The contributions are not deductible on your Federal return, but parents may be able to write off contributions up to a certain dollar amount on their state income tax return. Log on to SavingforCollege.com to find out information about your state.</p> <p> </p> <p>9. Home Improvements<br /> </p> <p>Here is a great deal. How about saving energy and the environment, lower utility bills, increase the value of your home and save on taxes </p> <p>

Financial security at a young age makes life more fun. What’s more today’s youth will need to self-fund their own retirement or face the prospects of working until they die. That doesn’t sound fun to me. The good news is that there are simple steps you can take to live life to its fullest and obtain financial security young.

A recent study by the Government Accountability Office (GAO) predicts that one out of every three workers will have nothing ($0) saved in a 401k style account by 2050. This statistic is supported by the National Association of State Boards of Education’s report that states ‘most workers aren’t participating sufficiently enough to allow comfortable retirement’.

Many people are aware that they need to start saving for their future; however most people have no idea where to start or how much they will need. With uncertain economic times it is now more important than ever that today’s youth start investing young. That means giving practical financial education skills to young adults early in life so they can achieve financial security.

Plan for Financial Security while Your Young.

The thought of retirement may be a ways off for those under 30 years old; however this is a critical time to secure your financial future. The sooner young adults invest the easier it will be for them to achieve financial security. This provides the freedom to live life to its fullest. These simple lessons will have you on the road financial security and, as equally important, will allow you to fully enjoy life now.

1) Invest early – The earlier you get your money working for you the sooner and easier you will have financial security. By investing young you are able to harness the power of compounding interest.

‘Compounding interest’ is simply earning money from the profits of your investments. So you’re making money off money you did not have to work for. This gives today’s youth an advantage. In fact, investing as little as $100 per month starting at age 18 could make you a millionaire well before you reach retirement age. Plus it will give you the ability to afford and fully experience life during the process.

2) Investment consistency – Investing on a consistent basis will allow you to generate long-term gains over time. For most, simplicity equals consistency; and a consistent investment plan leads to long-term financial security. Start to follow a consistent investment plan now; then as your investment knowledge grows you can add other forms of high-return investments.

3) Diversification – Diversification lowers risk. If you have all your money invested in the stock market, and the market crashes, you could potentially loose a lot of money. Now if you had a portion of your money invested in stocks, some in real estate, some in businesses and some in other alternative investments – if any one of the markets corrects itself, you wouldn’t get hit as hard since you’re diversified.

4) Tax benefit vehicles – Use investment vehicles that give you tax benefits. Many people don’t realize about 40% of your income goes to pay taxes. So by choosing an investment vehicle like an IRA may help to keep more money in your pocket.

So the key to young adult financial security is following simple, consistent investment strategies starting at a young age. Being diversified and using investment vehicles that provide tax benefits will help to supercharge your returns. Start immediately to secure your future and so you’re able to enjoy your life right now.

If you are an employee, you can get a 40% pay raise without ever asking the boss. And it’s all tax-free. Similarly, if you are an employer, you can show each of your employees how they can earn a 40% pay raise and it won’t cost the employer a thing. Before writing me off as being a pair short of a full deck, read on.

The following information is based upon figures gathered in the late 90’s from U.S. Census Bureau, National Association of Realtors, Chicago Title and Trust, Bankcard Holders of America, and Ram Research. Though the figures will vary today, the net affect is the same since income has risen proportionately but debt load remains the same.

1. The average household income = $3935 monthly or $47221 annual.

2. The monthly mortgage average (without tax and insurance) = $662

3. Average car, credit cards, and loans = $568

4. Therefore, the average total debt = $1230

5. Debt Load Average (% total debt to income = $1230 divided by $3935) = 31.3%

Therefore the average family’s present lifestyle could be maintained with 31.3% (or $1232) less per month without debt. Another way of looking at the same information is that if the average family were debt free, their current annual income ($47,221) would be comparable to a family income of $71,428 annually with a 31.3% debt load.

But I said in the beginning “40%”, didn’t I? What was I thinking of? How could I have made such an error? It’s only a 31.3% pay hike. By the way, since you gain this increase by paying off debt, is this taxable? I don’t think so! Therefore, we need to compensate for a post-tax versus pre-tax pay raise.

You can conservatively add at least a 10% tax relief since this is a post-tax raise in pay. Our pay raise goal now easily exceeds 40%. Give yourself a real pay raise… Get out of debt! (To learn more about getting out of debt, check out the article Debt Destroyed By Magic Bullet)

What’s Wrong With a Traditional Pay Raise?

What’s wrong with tax cuts and a pay raise? Not a thing as long as it leads to increased wealth. Unfortunately, it rarely does. It usually just leads to increased income. So, what’s the difference?

Realizing that I am swimming upstream while most others are swimming down, I cannot help but be disillusioned. When was the last time a national pay hike or tax cut kept pace with the overall inflation and shrinking dollar? How come with all this extra money we keep coming up with, we are no better off then we were? Throughout my military career, I was always amazed that about 2-3 months prior to a federal pay raise, local prices near military bases went up. By the time the money actually arrived, inflation had already destroyed the increase. To make matters worse, not only do prices increase just before a pay raise, but we usually turn around and commit the raise to some new monthly payment purchase. “Oh yeah, now I can afford that new High Definition everyone is talking about.” When will we learn that more money does not necessarily increase wealth?

Become “Un-vulnerable”

I use to know a homeless fellow by the name of Pete. Pete use to be well off but fell onto bad times. Today, however, he is considered local color because of his spectacular wardrobe- straight out of Daniel Boone, Jedediah Smith, or Snowshoe Thompson. Pete is so colorful, tourists have their picture taken with him.

But Pete lives on the street. Yet, he is less vulnerable than most of us. Why? His income versus output is more positive than for most of us. He doesn’t owe anything to anybody. No one can take anything from him. He is completely independent. He is financially “un-vulnerable”

You can be “un-vulnerable” also and you don’t have to become homeless. You simply need to give yourself a real pay raise… Get out of debt

Wealth Has Nothing To Do With How Much You Earn

It’s been said that the best way to help out the poor, is not to become one. I can relate to that! So, I am not suggesting that we all become miniature Pete’s as suggested above. But we can learn a lot from him as well as an even more authoritative source- the bible. “…And the borrower is the lender’s slave.” (Proverbs 22:7) When you owe someone, they own you.

Now here is the point. Wealth has nothing to do with how much money you earn. Wealth is rather that sense of being financially independent, financially un-vulnerable. And unless you are completely out of debt, you are a slave to whomever you owe money. On the other hand, if you are debt free including your home, who can touch you? You then have the option of investing the money you use to waste paying bills. You can buy items cash and get the leverage cash can bring to the bargaining table and still remain out of debt. You even have the option of reducing the need to bring in a paycheck by living on less with a simpler life or a life more to your choosing.

Give yourself a real pay raise. Get out of debt.

Readers will probably be interested to know Mike, the author of this article, also offers a free debt elimination mini-course via e-mail. You can enroll at Debt Free In 7.5 Years.