Free From Broke

A Personal Finance Blog for Regular Folks

What You Need to Know About Taxes

Most people don't enjoy paying taxes. But the more we know about them the better we can plan for them. Articles here contain information on new tax rules as well as how to save and plan for your taxes.

Tax Time: What to Bring to Your Accountant

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Sometimes, it makes sense to have someone else to do your taxes.

If you have complex taxes, an accountant can make your life a little easier — and be worth every penny.

However, your accountant can’t work miracles. He or she can only prepare your taxes based on information that you provide. This means that you need to bring in everything needed to have your taxes done properly.

What to Bring to Your Accountant for Taxes

Personal Information

First of all, you need to have all of your personal information.

Bring in your Social Security number, as well as the numbers associated with your dependents.  The first time I used an accountant for taxes, I didn’t bring in my son’s Social Security number. It slowed things down a little bit, since I had to go back home to get it.
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The Taxpayer Relief Act of 2013 – The Fiscal Cliff Averted

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In an unusual act, Congress convened and passed a big time piece of legislation on a major holiday – New Year’s Day.

The bill, the Taxpayer Relief Act of 2013,  prevents the country from slipping off of the so-called fiscal cliff and it seems to have worked–at least temporarily.  Instead of collapsing on the first trading day of the new year, the financial markets had a strong rally on news of the passage of even an imperfect bill.

What Just Happened with Congress and the Fiscal Cliff?

The fiscal cliff negotiations were originally expected to include tax issues, spending, deficit reduction and even a hint of real tax reform.  Nothing that dramatic came about, but here are some highlights of what has been delivered:

  • Most Bush-era tax cuts have been made permanent
  • Jobless unemployed insurance benefits for 2 million long-term unemployed were extended for a full year
  • A Medicare reimbursement cut of 27% has been prevented
  • The top tax rate has been increased from 35% to 39.6% for individuals earning over $400,000 and couples earning over $450,000
  • Taxes on high income taxpayers will also increase on income from capital gains and dividends as well as inherited estates
  • Blocked a provision that would have made millions of middle class taxpayers subject to the Alternative Minimum Tax (AMT)

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The Fiscal Cliff Doesn’t Just Affect the Rich

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Though the election is long over, the debate over whether or not to extend the Bush-era tax cuts continues.

This is the so-called “fiscal cliff” that’s all over the media right now.

On the surface, this sometimes seems like a debate over taxes in general, and specifically on higher taxes for the rich.

But don’t bet on it – the fiscal cliff doesn’t just affect the rich – it has the middle class squarely in its crosshairs.

A series of tax increases will begin on January 1, 2013, if Congress does not take action to restore at least some of the Bush-era cuts.

And they’ll be substantial.

Not only will the tax cuts reach deep into the wallets of everyone who has a paycheck, but the fallout from the changes will have wide effects on the overall ecomomy too.

How the Fiscal Cliff Will Affect More Than the Rich

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New Taxes Coming for a New Year

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Each year, the tax laws change.  New taxes are levied, and some taxes are cut.

For 2013, you are likely to see some new taxes as old tax cuts expire and as new taxes are imposed.  The new year is likely to bring with it new impacts on your budget.

While there is no saying, for sure, what will happen (what with budget talks underway, and negotiations attempting to avoid the fiscal cliff), here’s what’s possible so far:

New Taxes You Can and Will See Next Year

Payroll Taxes Going Up

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

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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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