Tax Carnival Ecstasy – July 2, 2013

This image depicts the total tax revenue (not adjusted for inflation) for the U.S. federal government from 1980 to 2009 compared to the amount of revenue coming from individual income taxes. The data comes from the Office of Management and Budget’s record of the ‘Budget of the US Government FY 2011’, specifically the ‘Historical Tables, Table 2.1.’ The information is also here. (Photo credit: Wikipedia)

This image depicts the total tax revenue (not ... — This image depicts the total tax revenue (not adjusted for inflation) for the U.S. federal government from 1980 to 2009 compared to the amount of revenue coming from individual income taxes. The data comes from the Office of Management and Budget’s record of the ‘Budget of the US Government FY 2011’, specifically the ‘Historical Tables, Table 2.1.’ The information is also here. (Photo credit: Wikipedia)

Welcome to the July 2, 2013 edition of Tax Carnival Ecstasy. In this edition we start with an article from Bill Smith on completing your 2012 tax return for free if you have not already. John Schmoll writes about raiding a 401(k) to purchase property and how he would not do it. Keddon Carlisle has some lifetime tax planning software that looks quite interesting. Hope you enjoy all the material, like on Facebook, share, tweet, bookmark, and come back next time.

filing

Bill Smith presents Complete Your 2012 Tax Return For Free posted at 2012 Tax – Free Tax Filing Options, saying, “It’s time to prepare your 2012 tax return. But have you ever considered submitting your federal income tax return online?”

retirement

John Schmoll presents Things I Would Never Do: Raid My 401k to Buy Property posted at Frugal Rules, saying, “There is an increasing number of investors taking out loans on their 401k accounts in order to buy investment property. While diversification of investments is key, the inherent risk may not be enough to offset the potential gain. This is also not to mention the fact of the possible tax implications and loss of hard earned retirement savings.”

Keddon Carlisle presents Lifetime Tax Planning Software | Best Financial Planning Software | Retirement Planning Software posted at Best Personal Financial Planning Software, saying, “This lifetime tax projection software provides fully integrated IRA retirement calculator and 401k retirement calculator facilities automatically apply lifetime taxes related to your traditional IRA, 401k, 403b, 457, Simple, Keogh and other retirement accounts and to your Roth IRA and to your designated Roth 401k, Roth 403b, and Roth 457 account contributions.”

taxes

Bill Smith presents Filing Your Taxes At-Home – It’s Easier Than You Think posted at 2011 Taxes, saying, “Most customers aren’t aware of just how easy it is to learn how to do your own taxes online.”

Bill Smith presents TurboTax Makes Tax Season a Breeze posted at 2009 Taxes, saying, “Financial capability is a major part in an adult’s life. Finishing your degree and getting a job is needed in order to maintain a sustainable life, along with paying taxes.”

Bill Smith presents Filing Free 2012 Taxes Online: What You Need To Know posted at 2012 Taxes – Free Tax Filing Options, saying, “Are you interested in filing free 2012 taxes online? If so, you should know that TurboTax 2013 is the very best way to do it.”

Bill Smith presents Tax Return Extensions Made Easy posted at 2013 Taxes, saying, “Most people these days have such busy schedules and isn’t it a hassle to personally file our tax returns?”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

Why Retirement Savings Must Come Ahead of College Savings

A good college education is more important in today’s job market than it has ever been. It is nearly impossible to make a comfortable living without at least a 2-year degree from a community college. Parents today understand that sending their kids to college is the best way to help them succeed in life. It can be tempting to throw all of your resources toward that college education, even if it means cutting into your retirement savings. While college is important, you should never sacrifice your future stability to pay for tuition and books.

Fewer Options for Retirement Funds

Your child has a multitude of resources to help pay for tuition. Your retirement funds, on the other hand, are strictly limited to what you can invest in them right now. Help your child find alternatives to paying for tuition straight out of your pocket. Find out if your state has a special savings account option for tuition. The federal and state governments have created many different ways to help students get the education they need in order to become productive members of today’s society. Federal and state help with the financial needs of retired seniors is far less available.

Finding the Right Scholarships and Grants

Your young student’s performance in school could be a powerful investment toward his or her college costs. Scholarships are available from hundreds of different organizations for hundreds of different qualifications. A quick visit to the high school counselor will introduce you to thousands of dollars in potential scholarships and grants that you child could become eligible for. If you look into scholarship options early enough, your child could work toward meeting specific qualifications throughout high school, which could mean that you have to pay very little toward college.

Less Expensive College Alternatives

If the scholarship and grant money isn’t enough to cover a traditional 4-year college tuition, some alternatives can cut down on the costs of a degree. Consider sending your child to a community college for the first two years. Community colleges are ideal bridges to 4-year institutions because they allow the student to live at home and become used to being independent while providing all of the lower division courses necessary to transfer to a university. Your student can also test out of basic courses by passing a single test, the College Level Examination Program (CLEP). Passing CLEP cuts down on the number of classroom hours necessary for degree completion and therefore the cost of education. Working at least a part time job is another way to help offset college costs.

Staying Independent during Retirement Years

Eliminating the financial burden of college by dipping into your retirement savings is simply shifting that burden from right now to later. If your retirement funds are not adequate when you are older, you could eventually need to ask your children for help. It is better to help your children deal with financial hardships while they are still learning how to become independent than to need to ask for help when they have their own families to manage later.

Jessica Bosari writes about personal finance for Billeater, a site dedicated to helping families with money saving tips and advice.

Is A College Education Too Expensive For American Middle Class? (debt-consolidation-2u.com)

Do Not Lose Money When Saving For Retirement Use a Roth IRA

If you are saving for retirement by placing all your extra money into a savings account then you may be saving your money in the worst way possible. With a savings account there are minimal rules for the withdrawal of your money and no limits on how much you can place into the savings, but the amount of interest earned is practically non-existent. If your money is only placed into a savings account then over the years you are technically losing money.

This is due to inflation and in order to beat inflation a person saving for retirement must place their money into a retirement fund or invest the money. Otherwise the funds saved in a typical savings account will be worth much less than expected when time to cash in during retirement. Discussed below in this article are a few of the details that pertain to a Roth IRA and if you click here you can learn more.

A Roth account is a savings account specifically for retirement that is taxed the same year the money is put into the account. There are retirement accounts that allow for your money to grow and be placed into the account without taxes being applied until the money is withdrawn, but this is not the structure of a Roth IRA. Having your money taxed before being withdrawn is a benefit to some people but a disadvantage to others and this is typically the deciding factor for those in decision about a Roth.

Eligibility to contribute to a Roth IRA phases out at certain income levels, meaning if you make to much money you can not have a Roth. Most other retirement plans do not have this rule, but the worries are not to high because you have to make over $179,000 a year depending on your specific filing status in order to be cut off from having a Roth.

Also there are contribution limitations pertaining to a Roth in which depending on your filing status you can only contribute so much money a year to the fund. This defers most people and thus depending on your financial status you can decide if a Roth is right for you.

Start Saving Young For Your Roth IRA (2011taxes.org)
Traditional IRA or A Roth IRA You Decide (2011tax.org)

Understanding the IRA Tax Rule

Rules are one of the most important guide for everybody, so in order to avoid wrong decisions and moves, one must abide with rules. Rules are also present in investment and retirement plans like that of the IRA accounts or also called as Individual Retirement Account. This retirement plan can be used as a personal savings account, helping every contributing person to be secure when he or she retires. When one contributes, it means that he or she saves or sets aside some money out from his or her taxable income like his or her salary, bonus, tips, and alimony. Nevertheless, you cannot just have any IRA account because you need be guided by the IRA rules.

Individual Retirement Account presents a lot of rules to follow, from the eligibility rules to the withdrawal rules. Every rule has its specific purpose, limitations, and consequences. These are the roles of of the rules of the IRA, to guide you in making your retirement account productive. One important rule that you must basically know is the IRA tax rule. Knowing it helps you in the approximation and calculation of the tax liability if you want to convert your current retirement plan into another account that offers non-deductible account like that of the Roth IRA.

Knowing the IRA tax rules means that you are familiar with the IRA tax deduction that explains the deductible and non-deductible accounts. You will be able to receive an IRA tax deduction if you are married, and you and your spouse are active participants that have taxable income which includes your wage, salary, tips from your service, or alimony. As an active participant, you will become eligible to minus from your contribution that is established by your modified adjusted gross income, popularly known by its abbreviation MAGI to include in your filing marital status. This is true to traditional and SIMPLE IRA, but not with the Roth IRA because the latter’s contributions is categorized as non-deductible.

Therefore, being personally familiar with the IRA rules is being one step ahead than those who does not know anything about the rules of the investment plan. If you are having a hard time dealing with these rules but you want to apply for one, you may ask from a financial adviser that may be able to help you. Before you push through with your account, make sure that you understand every rule that the account has.

A Flexible Retirement Plan;Roth IRA (2011tax.org)
When can you Take Advantage of a Roth IRA Account Online? (2009tax.org)

401k Investors Want Help With Asset Allocation Strategies.

This article will focus on 401k plan participants expressed desire for help with asset allocation strategies; but, with a twist.

The author just finished reading a white paper prepared by ING Retirement Research Institute released on 3/31/2011. The title of the report is “Shedding Light on Retirement.” 2,600 401k plan participants were surveyed by the Boston Consulting Group on behalf of ING. One commentator took the report and proclaimed that the report indicated plan participants wanted help from their employers with asset allocation strategies. In fact 89% of the respondents said this was the help they wanted.

This is why I always prefer to read source material. Yes, the plan participants did say they wanted this help. However, in looking at the report, there were notable paradoxes in the responses. Specifically, 79% said they want control over how they invest; yet, over half stated they want more guidance, a roadmap, from their employer. In addition, 76% stated they want more investment choices; however, over half said they do not know how to achieve their retirement goals.

ING’s response to this survey was to create a website to help participants with education and offer personal contact, if they wish.

I suppose that is one solution. Perhaps another solution would be for employers to include professional 401k advisors for face-to-face, employee consultations. Survey participants seemed to suggest this is what they wanted; but, will such an offering by employers expose them to the Fiduciary Liability that they were so anxious to avoid when they terminated defined benefit plans?

Perhaps the responsibility is on the employee to realize they are truly on their own to find finance professional for themselves. Asset allocation strategies are not the only thing that 401k plan participants desire. Many said they need help determining how much money they will need to take them through their retirement years and they also wanted help with an annual checkup to see if they are on track. Perhaps 401k advisors are the answer. The real question is how to deliver the service.

Which Is Best for My Small Business? a SEP IRA or SEP 401k? (2008taxes.org)
Free 401k Advice for Plan Participants. (2011tax.org)

Which Roth IRA Account Online is the Right One?

The best Roth IRA account is the one that takes the investors information into account, and when these options are approached correctly, they are some of the best retirement options that can be employed. These retirement plans were designed with middle-income America in mind, and when the right plan is applied to the right situation, it can be very effective and safe. Two of the most important things to have on your side when it comes to setting up a Roth IRA account are the guidance of a trusted outlet and the proper trading and educational tools online.

Consider Your Options

One of most alluring aspects of the Roth IRA plan is the options and flexibility that they afford, with some individuals including bank CD’s and real estate options, but the best Roth IRA options are those that are suited to the individual, just as they are designed to be. There are many different providers and options for these accounts, and finding the best Roth IRA rates depends on careful comparisons of these outlets.

Stay With the Most Recognizable Providers

The best Roth IRA providers are those that first come to mind when considering online investing, Ameriprise and Fidelity, for examples, and these outlets are not just the most recognizable names, they have proven their reputations time and again, which is very reassuring when planning for retirement. Merely perusing the websites of the more established providers can help investors gauge the prices, risks and potential of some of the best Roth IRA account options.

Check Everything

Retirement is a big deal, and nothing should be left to chance, even when investing with the best Roth IRA providers. While the reputations of the major outlets are known for reliability, there is no guarantee of success, and this highlights the need for investors to check the strategies and the brokers themselves, as well as any other aspects like fees and commissions. This is no different from investments with penny stock brokers or stocks on the NYSE and checking the options often can help ensure a comfortable retirement without money worries.

How do you Choose the Right Roth IRA Account Online? (2009taxes.org)
Why Consider a Roth IRA Account Online? (2008taxes.org)

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