It’s that time of year again… No sooner do you finish nursing off your New Year’s hangover than it’s time to start thinking about filing your taxes.
Paying taxes is still something many investors overlook when making plans for their retirement portfolios. Without the right tax planning, your real returns could take a bigger hit than you originally planned.
It’s often been said that the only inevitabilities in life are death and taxes. And frankly, both are nothing any sane person likes to spend time even thinking about. However, although you can’t cheat the Grim Reaper, luckily, there are some things you can do to keep more of your assets in your wallet when the Tax Man comes to call.
Working for yourself is the American dream, right? There’s no demanding supervisor hovering over you, you can set your own hours, and — if you choose to work from home — you never have to contend with a grueling commute or even putting your shoes on some days. However, despite the very American ideal of having the independence to be your own boss, there’s also the necessity of paying your dues to Uncle Sam. And for many people who decide to become self-employed, the issue of taxes can be a bit scary.
Tax season is over and you’ve filed either your return or your extension. But before you put away \ those documents, take some time to look at it as a financial planning tool. There’s a wealth of information there that can be very useful to you… if only you know where to look.
It’s that time again… like a bad penny, April 15 keeps turning up, year after year. But while for many of us investors the tax filing deadline is enough to induce a headache, it doesn’t have to be that way. Especially since there is plenty of tax software to make this annual chore a whole lot easier.
In 1969, it came to the attention of the federal government and the public that there were 155 tax return filers with incomes of $200,000 — equivalent to an annual income of more than $1.3 million in today’s dollars — who paid no federal income tax. While their $0 tax liability was legal within the tax code at the time — they were using federally allowed income deductions and tax breaks appropriately — the government was embarrassed and moved quickly to legislate a solution. From this the AMT, or Alternative Minimum Tax, was created, with the aim of making the tax system fairer.
Have you thought about what you’re going to do with your tax refund? The average tax refund in 2016 is in the neighborhood of $3,053, $5 more than last year. That’s not exactly a life-changing amount, but it’s a decent chunk of change that can jumpstart an investment or savings goal.
It’s tax season again, and for many people that means figuring out what to do with a large refund check. Last year, the average refund was about $3,000, a decent chunk of change. A relative “windfall” like this can be the perfect time to start investing.
As is the case every year, the New Year brings changes for retirement plan contributions and limits, though 2017 will have more muted changes than most years. Retirement plans, like employer-sponsored plans and self-employed plans, will be affected. With inflation being on the low end of the scale, the changes in contribution limits generally remain unchanged for 2017, while income limits will increase modestly in some cases.
It’s almost that time of year — if you collect any kind of income at all, you need to be ready to file your income tax return. This puts a special burden on investors, which is why we’ve provided a simple checklist for organizing your investments for income tax preparation.