Archive for the ‘Tax’ Category
Monday, June 23rd, 2008 |
Finally. We checked our ING DIRECT savings account last night and noticed that we had received a $1,200 direct deposit from the US Treasury, which was labeled, “Tax Refund”. We’ve been expecting to see this deposit for a while now (Where Is Our Economic Stimulus Payment Direct Deposit?).
I don’t know if it’s just a coincidence but we received the deposit on the same date, June 20th, that the paper check schedule said we’d receive our paper check. Weird. Regardless, we now have our economic stimulus in the bank and we can stop worrying.
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Posted in Tax | 3 Comments »
Friday, June 6th, 2008 |
I recently started participation in my company’s Employee Stock Purchase Plan (ESPP).
I think it’s an excellent idea, and hope to sell the stock as soon as it’s purchased at the end of the 6-month term (called “flipping” the ESPP).
Then, I’ll use the ESPP stock funds to pay our property taxes, due early 2009. It’s basically replaced my property tax savings fund. Below, I present a bit more information on the ESPP, an example, and tips on making the most of your ESPP.
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Posted in Investing, Save Money, Tax | 6 Comments »
Thursday, May 29th, 2008 |
Economic Stimulus Payment Direct Deposit Schedule
Since May 9th, I’ve been wondering why we have yet to receive our tax rebate/economic stimulus payment by direct deposit. According to my SSN and the payment schedule, we were supposed to get the deposit on May 9th.
What I Know About the Economic Stimulus Payment
I know this is somewhat old news, so forgive me…but I’ve been wanting to post about this for a few weeks now and haven’t found the time. I previously posted about the tax rebate or economic stimulus payment, and how you could get your money quicker if you put your direct deposit information on your tax return (even if you were paying taxes), which I did.
I also posted about the revised tax rebate or economic stimulus payment schedule (which I assumed applied to me), and some vishing scams associated with the stimulus payments (which I think I’ve avoided).
I’ve since visited the Economic Stimulus Payment Calculator and determined that we should be receiving $1,200. I’ve even blogged about how you can use the stimulus money to get you free groceries and gas.
Could I be one of the unlucky 1,500? Doubt it. Wouldn’t I know by now?
You see where I’m going with this, right? WHERE IS OUR PAYMENT!!! I don’t get it. I’m pretty thick headed when it comes to tax regulation and rules, so help me figure this one out.
How I Filed Our Taxes
Let’s review my set of circumstances and let’s see if you can help me figure out why we haven’t received the payment via direct deposit.
- We recieved the original (and wasteful) ”you will be getting a Stimulus payment” letter from the IRS
- I completed our 1040, along with a Schedule C (for this blog), and a Form 8606 (to report previous non-deductible contributions to my IRA)
- I used TurboTax purchased off the retail shelf
- TurboTax calculated our stimulus payment to be $1,200
- I put our banking information on the 1040 (which TurboTax advised me to do)
- I physically mailed these to the IRS on April 11th, 2008 (thus, I didn’t incur any tax prep or filing fees)
- We owed money this year (so much we had a minor penalty), so I sent a check for the payment
- The IRS cashed the check on April 16th, 2008
What Others Are Saying
It seems that by now everyone should have already (a) received their stimulus payment via direct deposit, or (b) found out when they’ll be getting their check. Some people have already recieved their paper check. Others are in my boat and haven’t recieved their payment either.
Economic Stimulus Payment Paper Check Schedule
Initially, I’ll say that I’ve resided to the fact that we’ll be getting a paper check, so I guess I’ll refer to the paper check payment schedule:
If I’m getting a paper check, it will be mailed no later than (and received a few days after) June 20, 2008.
The IRS FAQ About The Economic Stimulus Payment
But wait…I just went to the IRS website and skimmed through their Economic Stimulus Payment FAQ and found this which seems to apply to our situation:
Q. I filed my return on time, but I haven’t received my stimulus payment, even though the payment date listed for my Social Security number has passed. Why?
A. In general, the payment schedule only applies if your return was received and the IRS finished processing it before April 15. If you filed your return on time, but close to the April 15 deadline, the IRS may not have finished processing it before April 15. Processing times for tax returns and stimulus payments vary. If you are getting a regular income-tax refund, the IRS will send you that refund first. Normally, your stimulus payment will follow one to two weeks later. If you are not expecting a regular tax refund, your stimulus payment generally should arrive a minimum of six weeks after you file.
The Answer?
Okay, now we’re getting somewhere. Because I filed our return on the 11th and they most likely didn’t process it until the 16th or later, the earliest we’ll be receiving the payment “should” have been yesterday, May 28th, 2008 (exactly 6 weeks from April 16th). I just checked our account…the deposit still hasn’t made it. Hmmm…. I guess I’ll have to wait a few days to determine if it’s something else.
So, my next question is…will we get it by paper check or direct deposit? I guess it doesn’t matter, but since the direct deposit schedule is now over, are they only processing checks going forward?
Posted in Money Stories, Tax | 25 Comments »
Wednesday, May 21st, 2008 |
The following is a guest post by Heather Johnson.
Check Your Property’s Value
New property values have been made public and you may be surprised by a leap in your home’s estimated value. This is great if you want to sell your house soon. Otherwise, this increase only means higher property taxes! Even if your home hasn’t increased in value, you may want to lower your existing property taxes. Below are a few ways you might be able to bring the amount down by contesting your tax appraisal.
Correct Any Errors - Look closely at your tax appraisal, as it was probably assessed from a drive-by inspection. Are any of the measurements wrong? Believe it or not, mistakes like this are fairly common. Sometimes, the square footage might be inflated or the appraiser might have been under the impression that you had more rooms or a finished out basement. In any case, those mistakes are easy to prove.
Look at Surrounding Home Values - If your next-door neighbors have houses that are comparable in size and their property is valued much lower, that could be grounds for the county lowering your house’s appraised value. Conduct some thorough research on all the nearby houses in order to back up your claim. Property tax records may be available online in some states.
Contest The Value - It’s Your Right
It is your legal right to contest your house’s appraisal, though very few people do it. This is a shame, as many homeowners would have a valid case and could potentially save a lot of money each year. If you feel you have adequate proof that your house was overvalued or that the appraiser made a mistake, visit your local assessor’s office or Website. There, you will find the official forms you need to contest your house’s value. One caveat: there is a deadline for filing a protest, so conduct your research as soon as property values are posted each year.
Heather Johnson is a regular commentator on the subject of small business. She welcomes your feedback and potential job inquiries at heatherjohnson2323 at gmail dot com.
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I recently recieved my County’s Propery Tax Statement. My property’s value estimate was slightly below what it was appraised for when we purchased our home 6 months ago. How about you…Did your value go down or up this year?
Posted in Personal Finance Links, Real Estate, Tax | 4 Comments »
Tuesday, May 6th, 2008 |
Use Your Tax Rebate for Free Groceries
When I first heard of retailers offering 10% more in gift card value if you use your tax rebate, I assumed it was only for those people who actually needed to cash the physical check there in the store. Curious, I went to Kroger.com and found this:
Use Your Tax Rebate Even If It Was Direct Deposited
I was wrong. All you must do to get the additional 10% is buy a gift card for $300, $600, or $1,200 prior to July 31st. The money to buy these cards can come from any source. So, even if you don’t get a tax rebate, you can do this. This from the Kroger website:
“May 2nd through July 31st buy $300, $600 or $1200 worth of Kroger Gift Cards, and get an extra 10% added to the value - FREE!
Offer applies to in-store purchases only of new Kroger gift cards, and does not include re-loads on existing gift cards. This offer cannot be combined with any other discount or offer. Limit one offer per household, with Kroger Plus Card. Bonus amounts cannot be redeemed for alcohol, tobacco, pharmaceuticals or lottery tickets.”
Does the Kroger Card Expire?
This from Kroger.com:
“Does the card expire: No, so long as value remains on the Card; however, if a Card has a zero balance for longer than 90 days, the Card will become inactive and value can no longer be loaded onto the Card.”
Will We Use Our Tax Rebate for This?
Because we use them for groceries AND gas, we easily spend more that $1,200 at Kroger every year. We might just take them up on this. Where else could $1,000 1,200 earn us $200 $120 in less than a year? Even if I wasn’t getting a tax rebate, with as much as we spend at Kroger, why wouldn’t we take them up on this?
Should You Use Your Tax Rebate This Way?
It’s obvious this isn’t for everyone. I believe my situation is unique, enabling me to take full advantage of this offer. If you’re in serious debt or in need of some emergency savings, I would advise focusing on those areas. If you’ve got a good handle on them and you are a frequent user of Kroger, then this might just be for you.
With that said, maybe a better title for this post would have been, “Use Kroger Gift Card 10% Bonus to Save on Groceries and Gas.” Of course, the bonus wouldn’t even be available if the tax rebates weren’t rolling out, so…
If You Don’t Use Kroger
Check out Hu$tler Money Blog’s ideas for making the Kroger gift cards work for you even if you don’t shop there.
Posted in Frugality, Make Money, Tax | 3 Comments »
Thursday, May 1st, 2008 |
I’ve written a lot lately about the tax rebate that most of us will be getting, now sooner rather than later. Today I heard about a new scam that’s going around associated with the rebates.
Vishing: New Name for and Old Scam
Vishing is the by voice (usually over the phone) variant of “phishing” which, as most know, is a bogus email which tries to get you to give up your private information (i.e. SSN, bank account numbers).
Tax Rebate Incentive
These types of scams can happen at anytime, but apparently they are particularly common during this time of year, when people are expecting tax refunds. This year there is an even bigger incentive to scam due to the tax rebate/economic stimulus package. Scammers think you’ll have a bigger stash in your account and that you won’t think it odd that the IRS is calling you.
What to Do if Vished (yes, I just made that word up)
If someone calls and says they are from the IRS or Social Security Administration (SSA) and they need information from you just hang up the phone. The IRS and SSA already have all the information they need on you, and they certainly wouldn’t call you up to ask you. This from the IRS:
“The IRS has no business need to know, and does not ask for bank account or similar information, except when taxpayers indicate on their tax return that they are opting for the direct electronic deposit of their refund. In that case, however, it is the individual’s responsibility to provide the IRS with the correct bank routing and account numbers on the tax return. The IRS does not contact taxpayers to verify the information.”
Remember, your tax rebate will be direct deposited into your bank account IF you gave them your banking information on your 2007 return. If you didn’t, they will send you a rebate check to the address on your return.
Source: Pamela Yip, Morning News
Posted in Tax | 3 Comments »
Tuesday, April 29th, 2008 |
Why I Did My Own Taxes
When I was in college and a couple years there after my Father, a CPA, did my taxes for me. Gotta love free tax prep service. :) Thanks, Dad. Since 2002 (when I recieved MY license) I’ve been doing my own. Although I’m not in the tax prep business, I feel obligated to do my own. What kind of CPA doesn’t do his own taxes, right?
I’m by no means a tax guru, but had little trouble with the very basic 1040EZs and 1040As that were required of me the past few years. Then, I got married in 2006. Since that time my taxes have become a bit more complex. This year was by far the most difficult. So much so that I think next year I’ll hand them back over to Dad. Here are some of the things I learned that may help you as well.
How to Properly Fill Out a W-4 When You Get Married
Many people are getting married this Spring. When they return from the honeymoon, one of the first things they’ll do is call up human resources at work and change their marital status. They should also change their Federal tax withholding on Form W-4.
Unfortunately for us, we didn’t properly make this change. We ended up owing $3,500 in taxes this year partly because of this. Ouch. Here’s the correct way to change your W-4 when you get married AND both spouses work. It’s easy, if you know where to look. This from the top right corner of the Form W-4:
“Two earners or multiple jobs. If you have a working spouse or more than one job, figure the total number of allowances you are entitled to claim on all jobs using worksheets from only one Form W-4. Your withholding usually will be most accurate when all allowances are claimed on the Form W-4 for the highest paying job and zero allowances are claimed on the others.”
Thanks to Smithee at Consumerism Commentary for bringing this to my attention. Mrs. PT and I have since made the proper changes and hope to be all squared away for next year. So if you, or someone you know is getting married this year, be sure not to make the same mistake we did. Make the change today.
What to Do When You Withdraw from Your IRA Early
Last Summer I decided to withdraw from my IRA early to use toward a down payment on our first home. I had a “basis” in this Traditional IRA (because I had previously paid the tax on some contributions…it’s a long story why I did this) and so I didn’t have to pay taxes upon withdrawal. Also, I was able to avoid any penalty because I used the money to purchase our first home.
If you’re in need of a bigger down payment, consider making this move for yourself. Here are the IRS rules for early withdrawal. You’ll need to complete a Form 5329 to let the IRS know that you’ve used the withdrawal for an exempt purpose.
How to Complete a Schedule C for Small Business Income and Expenses
Last but not least, I was able to include my blog’s very small income and increasing expenses (mainly the depreciation of a new computer) in a Schedule C. The loss from my business ended up reducing my taxes quite a bit.
I guess the main thing I learned from completing this schedule is that I’m going to have to get organized for next year. Income and expense will both increase greatly so I’ll need to do a better job of tracking both and making sure my personal and business finances remain separate. I’ve got a head start on this by opening up a separate bank account. Check out these tips for preparing for a schedule C.
Okay, one more quick thing I learned this year: there are many ways to file your taxes for free!
Did you learn something new about your taxes this year? Share your story below…
Posted in Tax | 6 Comments »
