Last Minute Fiscal Cliff Deal Kicks Can Down Road and Links

As expected our saints in Congress “came through” at the last possible moment to kick the proverbial debt, tax, and spending can down the road for a little bit.

A deal was struck, the middle class was “saved” — or was it? — and everyone can focus on using this small planned victory in the next election cycle.

…said the cynic.

Nonetheless your taxes won’t be jumping up by 27% next year.  Instead, a 2% discount in the Social Security tax that has been in place for a few years will disappear.  Many will moan and complain about having less money in their pockets and how this is a tax increase.  I see it more as you used to be able to use a coupon someplace, but now the store isn’t accepting 2% off coupons anymore.  The drop from 6.2% tax to 4.2% was meant to be temporary to boost the economy.

Considering the rate has been 6.2% since 1990, hasn’t been below 5% since 1973, and hasn’t been below 6% since 1988… I’d say it is the removal of a discount.  But people will still complain about losing 2% next year, and that’s understandable I suppose.  Just realize that you shouldn’t have had that extra 2% for the last few years, move on, and try to save or earn more money this year.

You can cover that extra 2% in Social Security tax easily by implementing a great financial plan to pay off your debt, earn more money, and save for a rainy day.  Here are some articles to help you do just that:

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When are Credit Card Annual Fees Worth Paying?


Paying a fee to a credit company for the privilege of using their credit card seems ludicrous, right?

Why would anyone intentionally pay an annual fee?

With so many free credit card options it just seems insane to pick one with an annual fee.

On the other hand, if you actually take some time to take a closer look at some of the perks you get by paying an annual fee for a specific credit card you might find the perks outweigh the costs.

For the longest time I personally thought this was crazy, but I’m starting to come around.  Let’s dig a little deeper.

Paying an Annual Fee for a Credit Card

You have two big steps to take before you jump onboard with an annual fee.

Identify Your Credit Card Usage

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How to File for Unemployment Benefits

There are millions of people that are currently unemployed and looking for work across the country.

Unfortunately, you just joined their ranks and find yourself on the wrong end of a pink slip.  You’ve never been unemployed and have no idea what to do.

How do you file for unemployment benefits?  Where do you turn?

You’re frustrated, lost, and perhaps a bit ashamed.

Don’t worry.  Every employer that has ever employed you paid into the unemployment insurance fund on your behalf.

It is now your turn to get to use that fund while you get back on your feet to find your next job.

How to File for Unemployment Benefits – 3 Steps

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Are You Ready to Fall Off the Fiscal Cliff? What You Need to Know if the Bush Tax Cuts Expire


The times they are a changin’ for taxes in the United States if legislation doesn’t change things soon.  Most americans are unaware of their taxes will be reshaped by the impending “fiscal cliff.”

The phrase that is being tossed around in the media is “falling off the fiscal cliff” or “taxmageddon”, and both are fairly accurate as to the repercussions.

Understanding exactly what is going to happen if we fall of the fiscal cliff is critical to your personal finances for 2013, so we’re going to break down some of the big points for you.

Repercussions of Falling Off the Fiscal Cliff

This list is pretty terrifying unless you enjoy paying higher taxes.

Expiration of Payroll Tax Cut

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Using a Roth IRA as an Emergency Fund – Pros and Cons

Roth IRAs are by far my favorite type of investment holding account available.

I love the idea of setting aside $5,000 in after-tax money in order to never pay taxes on the amount ever again.

There are other perks to using a Roth IRA besides never paying income tax on your nest egg.  One of the most prominent: you can withdraw your contributions at any time, even before retirement.  (This isn’t recommended, of course, but it is possible.)  You won’t pay any penalty or taxes for withdrawing your contributions under normal situations.  You will pay tax and penalties if you withdraw your investment earnings, so never do this.

This unique withdrawal capability has some people counting on their Roth IRAs as an emergency fund.

But is this a wise choice or a fool’s gamble?

Should I Use My Roth IRA as an Emergency Fund?

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What is Social Security Tax?

When you get your first paycheck from a new job you might be surprised to see how many different deductions reduced your earnings.

You’ll see deductions for Federal income tax, state income tax if your state charges it, and a whole host of acronyms of other taxes.

One of those taxes is social security tax.

We’ve all heard of it, but what exactly is Social Security tax?

What is Social Security Tax?

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Should I Use the Home Office Tax Deduction for My Home Business?

Everyone that wants to be audited, please raise your hand.

No one?

Simply mention the phrase “home office tax deduction” and most people instantly think of an audit.

To say there is quite the stigma surrounding taking a home office tax deduction would be an understatement.  On one hand, many individuals assume if they claim deductions for using part of their home for business purposes that they will automatically incur the wrath of an IRS audit.  On the other hand, being able to write off a bunch of legitimate costs is extremely tempting and could save business owners and their employees a lot of money at tax time.

So should you use the tax deduction from running your business out of your home?  What can you claim and what are the risks?

How to Stop Fearing the Home Office Tax Deduction

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