Come April 15th, or before are you getting a refund or do you have to pay?
If you are are rejoicing over you super-big refund of free government money...not so fast. All you are getting back is the principle from a no interest loan that you gave Uncle Sam.
Think of it this way, They pay you nothing extra if they give it back, not even a "Thank You Nice Lady!" Or...the charge you more then 10% if you are plus penalties! They will take everything you own to get at it.Pretty good business if you can get it!
With that sort of brute force behind you it is understandable that you would rather be safe than sorry. Or maybe it is just that you have a hard time saving and this is a great way to force you to do it.
Totally understandable. The real idea is not to recieve a lot or pay alot. It is to have the maximum available to you with out causing pain.
This is the time of the year when you should review your wthholdings. Here is a great calculator to look at this as well as some "what if" situations with your 401k. Now is the time to fix it now so you are getting your whole amount all year!
If you are havig a hard time budgeting savings, then see if your company does Direct Deposit, if so you are usually able to direct it to be paid into multiple accounts. Just pick an amout you want to save, divide it by how many times you are paid, then have that amount sent to a high-interest saving site such as E*Trade or ING. You will then get the same amount Plus Interest!
You'll get a smaller return next year, but you'll give yourself a raise!
Tuesday, February 12, 2008
Are you Getting a Tax Refund?
Sunday, February 10, 2008
Personal Finance QuickTake: Ten Filthy Rich Traits
The Street.com via Yahoo Finance ran a piece this morning about the "Ten Traits that Make You Filthy Rich." Just like in the book, "The Millionaire Next Door" they make the case that personal finance and living within your means is none of the best determining factors on whether or not you will be financially successful.
Their Top Ten list:
- Patience - Being able to wait to make purchases, ride out stock dips and save for the long term
- Satisfaction - Being happy with what you have. In Dave Ramsey's speak...avoiding Stuffitis!
- Organization - Being as productive as possible. Avoiding Stupid Taxes such as late fees!
- Discipline - "Personal finance isn't a way to get rich quick, but is a disciplined execution of your lifetime plans." Perfect!
- Reflectiveness - Learning from you mistakes
- Creativity - Doing whatever it takes to get out of debt, avoid picking up new ones and being agile in all things!
- Curiosity - Learn, Study and Improve yourself. I like to always look at Constant and Never-Ending Improvement to quote the tall one!
- Risk Taker - Doesn't mean betting it all on black, but understanding that there is a risk=reward balance and not being over-conservative.
- Goal Oriented - A favorite of mine. If you are working a Success Plan you are just working!
- Working Hard and Smart - Are you willing to put in the time? If not you are going to have a tough time getting truly ahead.
More then any other time in our history we have the ability to reach some pretty lofty financial heights in we plan for success, budget, live within our means, manage our money and invest wisely!
Sunday, February 3, 2008
The Agony of Defeat...
Do you know who Vinko Bogataj is? He was a moderately successful ski jumper for Slovenia in the 1970's. But what he is known for in American is the start of abc's Wide World of Sports. He IS the picture of "The Agony of Defeat."
That is how I am feeling right now...
Just got the ultimate Ninja Bill. We are doing so well, but as I have said before that wasn't always the case. When we moved here in December of 2006 we had a bit of a perfect storm. We were moving, had to cash out all of my options at my old employer, and had a huge medical bill hanging over our head. With no credit left or available and trying to move into a new house, we had only one choice...to tap my 401K. It wasn't much cash, but even with the penalties it was enough to get us moved, into the house and get the bill killed and pay off some really high interest debt. Desperate times Desperate measures... (He's At the gate)
Well today, two days after I filed my taxes, guess what I got...My 1099-R for the withdrawal. I thought it was in my 2006 taxes and didn't even think about it...(He is sliding)
So now I have to file an amended return. The worse part is that I went from having a $5013 Federal Refund to Owing $255! My state return went up $166! So I am still getting money back, about $2400 in total, but all of the Sugarplums dancing in my head just went rancid!- (The agony of defeat indeed!)
We did have taxes pull from the distribution, but the issue was the penalty...Well, now we have to print off a ream of papers worth of returns and get them out. Also given the extra income we will lose some of the Tax Rebate this summer...As Dave Ramsey says, Stupid Tax!
Let this be a cautionary tale for all of you to mind your finances! Or you could have as expensive of a morning that I have...off to cry :(
