Free From Broke

A Personal Finance Blog for Regular Folks

Miranda

Which is More Valuable: Tax Deduction or Tax Credit?

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As Tax Day draws closer, many are looking for documentation and trying to figure out whether they are taking a deduction or credit for each item that they hope will bring a tax advantage.

Understanding the difference between a tax deduction and a tax credit is important — especially when you stop to consider that one is more valuable than the other.

Is That a Deduction or a Credit?

The difference between a tax deduction and a tax credit can be expressed by the way it affects your taxes.
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Don’t Let Them Get Your Money! Where to Hide Money from Lawsuits, Creditors, and the IRS

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Are you worried that someone might be coming for your money?

Whether it’s a potential lawsuit, or even if it’s the IRS or a creditor, you probably want to protect your assets.

If you want to protect your assets, you need to know where to hide your money, and know how to properly structure certain accounts in order to avoid having someone drain your financial well dry.

Here are some places that you can hide your money:

Retirement Account

One of the best places to hide your money is an ERISA-qualified retirement plan.

Not only can you keep some of your money safe, but you can also earn a tax-advantaged return on the money.  The money in your retirement account is protected from liability lawsuits.  Additionally, your retirement account might have some protection from bankruptcy and creditors (not always, though).
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Blogger Tax Deductions You Can’t Afford to Miss!

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At first glance, it may not seem that you are spending a great deal on your blogging endeavors.

However, the fact is that blogging does cost money.  And, if you are making income from your blogging, you might want to offset some of that with the help of tax breaks for your costs.

Before you go claiming tax breaks, though, it is a good idea to double check to make sure that the items you claim truly are related to your blogging efforts.

If you are looking for some blogger tax deductions, here are some things to consider:

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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.

See What Income Tax Forms Report Your Income That You Need to Keep an Eye Out For

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What is VITA – Volunteer Income Tax Assistance Program (You Might Get Free Tax Preparation)

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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 $53,000 a year prepare and file their taxes — the VITA, Volunteer Income Tax Assistance program. Read on and see if VITA can help you prepare your taxes and get free tax filing.

What is the Volunteer Income Tax Assistance (VITA) Program

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