How I paid less in property taxes
Today I present the second and final installment of my property tax saga -- the informal hearing. (You can check out the first post here.)
To briefly recap, I'm a new homeowner and my assessed property value shot up by 31 percent from last year. So that, along with the fact that I have a tax-protesting father to please, landed me in County Appraiser Brad's cubicle for an informal hearing.
The bad news<
I was audited by the IRS! (and the red flags to avoid an IRS audit)
When I was young, my father got audited by the IRS. I can't remember the details -- I was young, and my father died long ago -- but I do remember how he fumed and fussed for weeks as he tried to gather the paperwork and make his case to the auditor. The IRS audit experience made an impression on me. I vowed that when I got older, I wouldn't be as messy and disorganized as he'd been, and that I'd always do a good job of documenting my taxes.
For the most part, I've stuck to that. I've tried to save every scrap of paper related to my personal finances and, especially, my business finances. I've always tried to be meticulous about respecting the wall between business and personal accounts. And since I started this blog eight years ago, I've tried to pay attention to the red flags that lead to IRS audits (which is one reason I've never attempted to deduct a home office expense, even though there are times -- like now -- when I could).
Homeowners: Could this save you thousands in just a few hours?
You know all those great tactics to save huge chunks of cash -- the tactics that don't require you to scrimp and save? I'm talking about things like lowering the APR on your credit card or getting a better deal on your car insurance -- paying less for the stuff that's kind of a drag to pay for in the first place.
Well, as a new homeowner, I've been working on lowering one of those no-fun expenses: property taxes.
Two weeks ago, I wrote about how I was surprised that my assessed house value was 31 percent higher for 2014 than it was in 2013 -- and that I had filed the paperwork to protest that assessment.
One year later: The benefits and tragedies of self-employment
Almost exactly a year ago today, I quit my full-time job to pursue my passion -- writing. It was one of the proudest moments of my life, but it was also terrifying. I had spent the last six years working alongside my husband, a mortician, in the funeral industry. My job certainly wasn't perfect; but it was stable, well-paying, and sometimes fun. I also loved the people that I worked with and was extremely attached to a few. On the other hand, I knew it was time. I had been working full time and writing on the side for so long that I no longer knew what a "real life" was like. In fact, my "real life" was a mess.
Everyone talks about how lucrative and exciting having a "side hustle" can be, but no one talks about the toll it can take on your life. Since I worked 9 to 5 and had two small children, the only time I could write was at 5 a.m. before work or at 8 p.m. after the kids went to bed. This meant that I was working 16 hours a day at times -- actually all the time. And the weekends? I worked those too.
But, like I said, one year ago today was the day I finally snapped. It was a Saturday afternoon and I had worked over 70 hours that week, yet I was stuck working late at my job … again. I called my bosses and asked if I could talk to them. And when I showed up at their home, I nervously put in my three weeks' notice and hoped they would forgive me. Then I called my husband. Continue reading...
Year-End Tax Tips
Right after the most wonderful time of the year comes everyone's least favorite season: tax season.
If you usually try to avoid thinking about taxes until after January 1, you may be missing out on the chance to save a little money. According to some tax experts, now is the time to take last-minute action if you want to reduce your tax bill in April.
Here are seven-year-end tax tips
1. Double-check your tax withholding and payments
Taxes: Don’t rush it
I was really excited about filing my taxes this year. For once, I wasn't really in need of any pricey things for the house (though I have plenty of wants. Hello, wood stove!), and was rubbing my hands together with the thought of the emergency savings fund I'd soon have in the bank account! Thanks to my husband's tax-free military pay, and my lowish freelance income when he's overseas and full-time caring for the boys, we are due a large refund again.
I had a lot of to-dos on my list last week, and the taxes had the biggest payoff, so I tackled them one late night after finishing two other little projects. I could make that week's e-filing cycle window if I got them done before morning, so I plunged on through, guessing at one number for which I couldn't find documentation. It was part of the mortgage interest, and I knew I probably wouldn't make the itemized deduction cutoff, so it wouldn't have any effect on my taxes, anyway.
My husband's school expenses were the only new thing to consider; he's taking online courses while he's deployed. I didn't think there would be much tax effect, but I dutifully added the numbers from the statement I had into the appropriate part of the online tax form. It was late, and I rushed. I just wanted to cross the to-do off my list. I could see that checking account cushion materializing before my eyes… submit! submit! Continue reading...
Redefining Frugality: Mistakes and Money Lessons Learned as a Freelancer
Sitting on my desk as I write this is an application I should have filled out months ago. Twenty-two months ago, to be exact.
It was then that I left my 40-hour-a-week office job, which included a convenient 401(k), dependable health care plan and, most refreshingly, a kind and understanding boss. It was tough to leave that job, but I wanted to pursue a career in freelance writing.
The entire experience was overwhelming. Details of that are for another post, perhaps, but the point is: what I found most overwhelming was dealing with my own finances. Administratively speaking, my employer had taken care of my retirement plan, taxes and health insurance. It was great.
Prepare for the Tax Preparer to Save Money
Tax Day falls on my birthday. This year, I'm giving myself the gift of a tax preparer.
Last year, in the days leading up to The Big Day, I locked myself in the home office. I emerged bleary-eyed from staring at a computer screen and mentally exhausted from climbing my way through an avalanche of paperwork and receipts. I also was hopped up on caffeine and paranoid — did I miss anything? Did I forget to carry a "1"? Was my hair on fire?
Yes, I waited until the last couple of weeks to file my return. I'll admit it. I hate doing my taxes nowadays, so I avoided it as long as possible. Continue reading...
How to spend a tax refund
Hey, average American, what are you planning to do with the tax refund you are about to receive? So let's start with useful ideas for spending your tax refund for those in the first stage of personal finance and work our way up to those who are less pinched. Depending on which stage of personal finance describes your current financial situation, your tax refund can help you along if you plan carefully.
Before we go there, though, why are you getting a refund in the first place?
11 Things You May Not Know About Retirement Accounts
I don't know you personally (yet), but my guess is that you own an IRA or employer-sponsored retirement account such as a 401(k) or 403(b). Such accounts are where the majority of Americans hold their longterm savings. However, like anything governed by the Congress and the IRS, there are plenty of rules, exceptions, and quirks. Here are some lesser-known facts about retirement accounts.
1. The deadline for 2011 IRA contributions is April 17, 2012.
It's too late to make a 2011 contribution to your 401(k), but you have until the tax-filing deadline to contribute to an IRA. That's usually April 15, but it's been extended to April 17 this year since April 15 falls on a Sunday, and April 16 is Emancipation Day in the District of Columbia (as well as the birthday of Peter Billingsley, who played Ralphie in A Christmas Story, but I don't think the IRS cares about that as much).
2. Contribution limits are up for 401(k)s, not for IRAs.
The most you can contribute to an IRA in 2012 is the same as the limits for 2011: $5,000, with an additional $1,000 for those age 50 or older. However, the amount you can contribute to a 401(k) has been increased to $17,000, with an extra $5,500 for the 50-and-older crowd. So if you maxed out your 401(k) in 2011 and want to contribute the max this year, you'll need to increase your paycheck withholding.