I was audited by the IRS! (and the red flags to avoid an IRS audit)

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).

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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.

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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...

More about...Side Hustles, Insurance, Taxes

Looking ahead pays off until “boom”!

This reader story comes from JenB. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.

I thought I had it all figured out, but the middle-of-the-night panic attacks have started again as a result of a little piece of mail I received this week. You see, I'd finally made the scary decision to quit my job and stay home with our first baby (for at least a year) when — BOOM! — our annual escrow account disclosure statement arrived in the mail.

I didn't even know this could happen, but our mortgage payment is going up $600 a month starting in three weeks with our next payment. “What?” I thought I had looked ahead for every possible snag in my plan. It turns out you may not necessarily see everything that's coming … and sometimes you don't even know what you should be looking for until it arrives in the mail.

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More about...Career, Home & Garden, Planning, Taxes

Ask the Readers: 5 questions about your taxes

It's that dreaded time of year, but we all must face it. So let's talk about taxes today. I've got some questions (and offer my answers).

1)      Do you get a refund or max out your withholding? A recent Moneyrates.com survey found that 31 percent of the 2,000 people surveyed prefer to get a refund. I confess — I get a refund every year.

If you want to stop the refund madness for tax year 2014, just go to IRS Publication 919 and see how to change your withholding.

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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

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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...

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Tax-efficient charitable giving

This is a guest post from LD, a practicing Certified Public Accountant and Certified Financial Planner who blogs about personal finance at Personal Finance Insider.

Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.

Generosity is exactly this: to give that which is dearest to us. It is an act that transforms us. After it, we will be poorer, but we will feel richer. Perhaps we will feel less equipped and secure, but we will be freer. We will have made the world we live in a little kinder. — Piero Ferrucci Continue reading...

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How to Pick the Best Darned Account for You

Happy World Wide Invest Better Day!

What, you're not familiar with this holiday? Well, it might because we at The Motley Fool invented it, and today is the first time we're going to celebrate it — all day long, over on Fool.com.

For today's post, I'm borrowing one of the videos I shot for Invest Better Day. The Fool has long had the 13 Steps to Investing Foolishly, and we recently put them to video. One of my installments was about choosing the right investment account for your goals, filmed with the assistant of my colleague Lyons George. Here 'tis: Continue reading...

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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.

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More about...Budgeting, Insurance, Retirement, Taxes