Friday, February 11, 2005

Taxes Ready to Go

My taxes are pretty much done and ready to e-file. I've used TaxCut Deluxe every year since 1998, and have always been extremely pleased with it. I've referred numerous friends and coworkers to TaxCut, and they, too, have all been happy with the program. (Have I mentioned how much I love our Mortgage Credit Certificate, which gets us a federal tax credit of 50% of the mortgage interest we pay each year, up to $2,000? Boy, was that worth jumping through the hoops for!)

As for my household's bottom line regarding our 2004 taxes, we're due a refund of $100 in federal taxes, and we owe $40 in state taxes.

Since my goal with taxes each year is to get as close to breakeven as I can, I'm good with the results for 2004.

— Posted by Michael @ 1:10 AM



Congrads on the ALMOST precise estimation of your taxes... I could only dream of getting within $100. Personally, this year, I'm getting WAY too much money back. Why does it sound as if I'm upset about that? Well, poor planning, my friend. Throughout the year, I should have been meeting with my CPA to discuss tax strategies and layout a plan. In the past, I've simply used TaxCut (from 1998 until 2002) and TurboTax (in 2003) to calculate my taxes. I also use Quicken to follow my finances. I would strongly recommend EITHER of these tax preparation programs for anyone who simply has a W2 and/or a small business. However, for a larger small business (is that an oxymoron?) and/or real estate investments, I strongly encourage people to locate a good CPA. A good CPA should be a person who is willing to meet with you in the beginning of the year and assist you with a PLAN for next year's taxes. WHY? Well, tax laws don't always stay the same... they CONSTANTLY change... even throughout the year. This can be especially trick if you have your own business or invest in real estate. Having a good CPA who keeps abreast of changes in tax laws is a must. I paid a total of $180 to meet with my CPA AND finish up my taxes. Is this too much money... HELL NO!!! Considering it took me about 40 hours to do my taxes in TurboTax last year... and this year, I purchased three separate rental properties complete with income, improvements depreciated at different rates, rental expenses, supplies, and utilities... this along with a new small business and all the mileage assocaited with each venture. $180 was WELL worth the 1-1/2 hours my CPA and I spent doing my taxes (seeing how TurboTax would cost me around $90 for the version I need). This coming year, I plan on meeting with my CPA to get a rough projection of what my taxes WILL BE. Then, I'm going to march down to the human resources office at my "day job" and tell them to STOP taking so much money out of my paycheck and send it straight to my ROTH IRA account.

In summary, I encourage everyone with basic income and expenses to prepare their own taxes with their favorite software. It definitely helps to visualize where money is spent throughout the year and also to develop a better plan for money management in the future. However, a person may tend to get bogged down in these software programs if the tax return requires huge amounts of detail. In that sense, discuss with your favorite CPA how to PLAN for taxes for next year, instead of trying to play "OK, how can you get me more money back now that the tax year is over with?" Be aware of tax laws that directly affect you and your business. Get educated and determine how you can USE the tax laws to plan your future finances.

Well, I'm off to blow my entire $7800 tax refund on a new Cadillac Escalade!!!

... just kidding!!!




THE IRISH FAIR TAX MODEL. How to boost the economy to 5% growth.

Irish wealth grew with over 167% between 1984 and 2002. Average European wealth grew at less than a quarter of that pace. Irish industrial jobs increased with 35% in this period, while in the rest of Europe industrial employment caved in. While the rest of the world was booming, the European economy gradually slided into stagnation or even recession.

Why is Ireland so different? Why could Ireland devellop into the second most prosperous country of Europe in barely a half generation of time? The Irish socio-economic model is a perfect synthesis of the social welfare state and Anglosaxisch liberalism. Its model differs from the rest of Europe by its "fair tax system": an optimal combination of MODERATE AND EFFICIENT GOVERNMENT SPENDING (35% of GDP) and A BALANCED REPARTITION of the TAX BURDEN between direct and consumption taxes.

The irish model provides the incentives for productive contribution, for dynamic entrepreneurship and a high participation rate. The Irish model is successful. Today Ireland meets the challenges of globalisation and the demographic time bomb. Ever more European countries adopt Irish policies, particularly in the East.

Also in England, France, Belgium, Holland and Germany could boost growth, job creation, and wealth by implementing the strategy of decreasing their demotivating taxation, and shifting the tax burden from income to consumption. Ireland showed that it can be done and that the strategy works. Where does one wait for?

More over the Irish success story, how and why can be found at following adresses:
(Dutch and Frensh versions now available at the same web site)

** Comments Closed on this Post **

Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
— Dave Ramsey


Start (2005-12): ~$21,900
Currently: $0
[About Our Debt Paydown]


Savings Goal: $15,000
Currently: ~$15,115
[About Our Liquid Savings Goal]