Taxes typically make up the largest--and most confusing--portion
of people's expenses. However, they also represent one of
the best ways to reduce our spending.
In this section, we'll make you tax savvy by explaining how
the system works, offer basic planning and tax-preparing strategies,
tell you what kinds of professional help are available, and
help you to reduce your chances of getting audited.
You file your tax return every year, but do you know the difference
between a W2 and a W4? This section describes the basic elements
of your tax system and how it works.
Even though tax planning can be a potent way to reduce your
spending, people often assume that their incomes are too low,
investments too simple, or the potential savings too small
to justify anything that resembles tax planning.
Luckily, basic tax planning techniques, which are usually
the ones that have the greatest potential to reduce your tax
bill, are easy to learn, straightforward to implement, and
Read this section to learn about exemptions, deductions,
withholdings, tax credits, and retirement accounts.
Preparing your own taxes can be relatively quick and painless,
even for fairly complicated returns. We'll help you decide
if preparing your own taxes is for you and how to go about
Sometimes it's better to let the pros handle it. Real estate,
investments, and life changes can turn your tax return from
EZ to impossible. We've made a list of professionals who can
help and what you should expect from them.
Although the IRS may select you at random, you can reduce
your chances of being audited by avoiding certain "red
flags" on your tax return. Find out what they are and
how to file your taxes in the most compliant way possible.
Taxes tend to make peoples eyes glaze over. Nonetheless,
it is important to know your marginal tax rate when making
So you've signed on the bottom line, slipped your tax return
into the mailbox, and a financial advisor is probably the
last person you have an interest in seeing.
At tax time, the freedom of being your own boss can suddenly
feel like a curse. If you're self-employed, filing your taxes
is never easy--on top of paying almost twice as much for Social
Security and Medicare, you're subjected to a flood of special
rules and regulations.
Tax Planning Strategies
Many people wait until April to start thinking about taxes, but thinking about your taxes before the tax year ends can help save you money.
The first step towards minimizing your taxes is to be conscious
of what creates a taxable event. If the benefits from your transaction
outweigh the tax consequences, you may not always choose to act
in a way that minimizes taxes.
Finance 101 for eWorkers - Tax Basics
Succeeding as an independent professional requires immense talent
and skill. But even if you are the best Web developer north of the
Rio Grande, you also need to know how to run a business.