I came across this table showing the change in your tax bill in 2009 vs. 2008 if McCain or Obama's policies are fully implemented.

As we all know, what politicians say when they are campaigning, is usually different once they get into office.

CNN posted an article online summarizing the Tax Policy center's report comparing John McCain and Barack Obama's proposed tax plans. The numbers are remarkable, but CNN fails to notice the obvious punchline: more than 85% of Americans will pay less in taxes under Obama than McCain. From the table, we can see that if you make less than $112,000 a year, then you will pay less in taxes under Obama's policies compared to McCain's. According to the IRS, 89% of Americans report less than $100,000 in adjusted gross income (2005).

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Posted By: Joe on Friday, June 20, 2008
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If you receive a tax refund every year, you may be missing out on an unused resource.

W4 allowances are not the same thing as the exemptions you claim on your tax return. You would claim more, for instance, if you have things like a large amount of itemized deductions, instances of children under age 17 or claiming dependent care credit to name a few. That is why it is so hard to adjust it correctly, so a lot of adjusting might be involved. I am no expert in what to put on a W4 in the first place, nor doing the worksheets that come with it.

The IRS W-4 form is not that difficult to fill out. You can even check out this site for a W-4 calculator and it will tell you what to put on the IRS form.

A good rule of thumb I follow is if you receive a refund over $500, or you owe more than 10 percent of your total tax bill, you should adjust your exemptions.

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Posted By: Joe on Wednesday, June 11, 2008
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If you listen to Dave Ramsey, you have heard him mention stupid tax. I don't think this photographer is going to realize his mistake until he is on the way down.

stupid tax - the money you pay for being stupid.

Your stupid tax knows no boundaries and I am sure you can think of several, so here are a few for a refresher:

Holiday shopping sprees
Trying debt consolidation
Debt management companies
Bankruptcy
Credit card debt
Whole life insurance
Lack of budgeting
Store discount cards
Prepaid funeral expenses
Car leasing
No savings

Do you have any to add?

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Posted By: Joe on Monday, June 02, 2008
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Someone asked if the stimulus money that will be arriving next month will be taxed.

When you do your 2008 income tax return, you will be asked somewhere in the preparation process how much of an advance you got in 2008. (By the person doing your tax return, by the software program you are using, or if doing by hand, the instructions will have you enter it on a worksheet.) This is not in order to tax you on it. This is to calculate to see whether or not you got the full credit and, if not, you will get the remainder of it that is still due you when you file your 2008 return.

Some people who do not receive the stimulus funds now will get it when they file their 2008 tax return. You have to take into account what you did receive so that you are not getting it twice. On the other hand, maybe you end up getting more than you should have if it had waited until you filed the 2008 return and in that case, you do not have to pay any of it back. I am not sure exactly how this is all figured, but the child tax credit is increasing to $1300 (therefore you will get $300 for every dependent child on your 2007 tax return who will still be under age 16 by the end of 2008). If you cannot for some reason claim that child on your 2008 return you still get to keep the $300 you got for that dependent.

To sum it up, the stimulus check, is a one time tax credit just paid in advance. Your taxes for next year will not be affected.

Labels: Income Tax, Stimulus, taxes

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Posted By: Joe on Thursday, April 24, 2008
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Posted By: Jim on Tuesday, April 15, 2008
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I started my taxes early this year just to see what it would look like because of some life changes that occurred this year. With TaxACT I was able to pull information from my previous return from their secure site and get rolling. I threw in some ball park figures and was able to compare 2006 with 2007 to see where things changed. After that I was able to compare with the rest of the nation. Before submitting, one can run an alerts scan and check you return for any errors that would otherwise hold up your refund. This will be my seventh year using TaxACT and I highly recommend it to you. You will not find it in stores, so visit them, TaxACT.

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Posted By: Joe on Wednesday, December 26, 2007
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