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Is Your High Power Job Worth the Sacrifice?

Many students go to college and pursue known money-making degrees—engineering, computer science, and business among a few of them.

They may pursue these career tracks because they are truly interested in the field, or they may choose them because they want to be financially comfortable during their lifetimes and they know that a lowly English major, while pursuing her passion, will never be rich.  (Ask me how I know.)

Follow these individuals 20 years later when they have achieved a great deal of financial success, and you may find them less delighted with both their lives and their chosen career paths.

A High Power Corporate Job Isn’t All It Seems

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What is VITA – Volunteer Income Tax Assistance Program

Many people would like help with their tax returns, but don’t know how they can afford to employ the services of a tax professional.

It’s true that some of the major income tax preparation services advertise that they will file your taxes for free, but this isn’t always the same as preparing them; in many cases you can only have the 1040-EZ prepared for free.

If your taxes are a little more complicated than a 1040-EZ, yet you don’t feel like you can afford to have an accountant or other tax professional help you prepare your Form 1040, you do have a place to turn.

The IRS sponsors a program designed to help those who make less than $50,000 a year prepare and file their taxes.

Volunteer Income Tax Assistance (VITA) Program

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Marginal Tax Rate VS Effective Tax Rate – What are They and How do They Affect You?

Most of us have no idea what either our marginal or effective income tax rates are.

They only seem to matter at income tax filing time, usually appearing as supplemental numbers in a computer generated income tax return.

One of the reasons we tend not to track these numbers is because they’re calculations, which for the most part, have no immediate relevance to us, but also because of complications in calculating them.

Because we have a progressive income tax system — tax rates rise with income — and because there are multiple taxes, the actual numbers can be difficult to calculate.  In addition, each rate can change from one year to the next or from complications in the tax code.

We have two tax rate classifications then, marginal tax rate and effective tax rate.

What is the marginal tax rate and the effective tax rate and how and when do they apply?

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Obama Proposed Corporate Tax Reform – Cut Tax Rate But Seal Up Loopholes

It’s yet another example of something that most lawmakers agree on yet it most likely will not get done.  Washington gridlock is alive and well even when there is no disagreement on the core issue.

That is the main problem with the corporate tax.

Currently, American corporations pay a 35% tax rate, higher than any other advanced country and most lawmakers, tax experts and, of course, corporate CEOs believe that this is too high.

Because of that, President Obama proposed lowering the tax rate to 28% in an attempt to make America a more corporate friendly place to do business.

The chances of this issue gaining enough traction to get through Congress is essentially none.

Here’s why. Continue Reading

Tax Time: Are You Reporting Your Income? Different Tax Forms to Look For

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For many, income reporting at tax time is fairly straightforward.

You get a W-2, there’s your income.  The IRS gets a copy of the W-2, your state gets a copy, and you keep a copy for yourself.  Your income is reported on this form, and you don’t have to worry a great deal about other income reporting.

However, in a world that increasingly provides opportunities to earn money from side hustles and investments, reporting income has become a little more complex.

It can be tempting to avoid reporting income to the IRS, but it’s important to remember that failure to report your income is illegal, and can result in fines and penalties and even criminal charges.

As the IRS works to recapture some of the revenue it feels it has been losing lately, you should understand that more people are reporting your income to the IRS than before.  So you need to be on your toes. Continue Reading

Four Places Not to Use Your Credit Card

Americans are in love with credit cards.

Many of us have replaced the cash in our wallets with our cards, charging everything from a cup of coffee to large purchases like automobiles.

Although credit cards are convenient, they aren’t right for all purchases even if you can get rewards points or cash back.

In what cases are credit cards a bad idea?  Here are some places NOT to use your credit card: Continue Reading

Should You Buy a Bigger House?

Because home prices and mortgage interest rates currently are so low, if you are in a stable financial position, now might be a good time to enter the home buyers’ market or sell your current house and buy a bigger one.

Remember all of the McMansions people built and bought before the housing bubble burst?  Perhaps you are tempted to get your own larger, dream home.

The question is, should you?

If you have weathered the current recession and have the funds, those beautiful, large houses that were built just fifteen to twenty years ago may be tempting.  Even if the price on a larger house is one you can afford, think carefully before upsizing.  With an upsize comes many other upsized costs.

Consider the following if you want to buy a bigger house:

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