The Government Wants To Limit Your Retirement Savings!

uncle-sam

The US government wants to limit how much money you can save across your tax-advantaged retirement accounts (401k,IRA, Roth IRA…). President Obama released his budget plan the other day and one specific proposal really caught my attention. In the name of raising $9 billion in new revenue for the government, the President wants to limit the amount you can save in your retirement accounts to $3 million. The reasoning for the $3,000,000 limit is that it’s about equal to an annuity that would pay out $205,000 per year. A “reasonable retirement” in their terms. My initial reaction to the plan was some combination of shock and anger. “How dare they tell us how much we can save in our retirement accounts!” However, after taking the time to sit down and think about it some more, I can see both side of the argument.   Not many people are affected, at all. Currently 0.3% … Continue reading

Infographic: How Americans Spend Their Tax Refund

tax returns, tax refund, tax preparing, tax return, federal taxes, irs

Tax day is closing in fast. If you haven’t filed your tax return yet, well, what are you waiting for?! April 15th will be here before you know it. So decide if you’re going to be doing your taxes yourself, or if you’re better off hiring a tax pro. I filed my taxes weeks ago and am getting a refund from both the federal government and New York state for what seems like the first time (thank you mortgage interest deduction!). The average American received a tax refund of just over $2700 in 2012. Being the responsible finance blogger that I am, I gave you five dumb ways to go out and spend your refund check. Thankfully not everyone is irresponsible with their refunds. My friends at Green Dot have once again put together an awesome infographic that breaks down some interesting stats about who gets a refund, tax changes … Continue reading

Five Dumb Ways To Spend Your Tax Refund

burning-money

I filed my taxes this weekend, and like the majority of Americans I’ll be getting a refund from Uncle Sam. In 2012 the average tax refund was around $2900. You may remember that I’m not a fan of getting a big tax refund, and my refund this year is well below that average. Even still, I haven’t gotten a tax refund in a few years and it is exciting to consider the possibilities of what can be done with that money. I could drone on and on about how you should pay down your debt, build up an emergency fund or invest your tax refund. But what fun is that?! Instead, let’s look at the dumbest ways to spend your refund check! 1. Throw a Party – Believe it or not, I had a friend who did this. He threw a huge party after getting his check and spent it … Continue reading

Alternatives To Paying Income Tax

flat tax, consumption tax, national sales tax, simple tax code

73,608 73,608…what is the significance of that number? If you answered “the number of pages in the 2012 US federal tax code” congratulations, you win! The federal tax code is bloated and over complicated. Every election it seems a new set of politicians from each party pledge to make simplifying the tax code a top priority, yet it never happens. Judging from the feedback on my post about preparing your own taxes it seems more and more people are opting to have a professional do their taxes for them. Really, who can blame them? Its gotten to the point where even those of us that do prepare our own tax returns can’t do it without the aid of complex tax software. Instead of tinkering with our current system and making it even more complex as we strive for fairness, why not throw the entire thing out the window and explore … Continue reading

Do 47% of Americans Really Pay No Taxes?

burning-money

Taxes. As the saying goes, “the only things you can count on in life are death, and taxes.” They’re just one of life’s necessary evils and we all have to pay them….or do we? A common  argument, and one that’s getting a lot of attention right now is the argument that 47% of Americans don’t pay any taxes and are just living life completely dependent on government support. It’s convenient that this is making headlines right now, because it touches on one of my biggest pet peeves when it comes to talking taxes: people only focus on income taxes. I’m going to try to stay away from all the political stuff and focus on the core of the argument: Do 47% of Americans really pay no tax? If so, who are they? “The 47%”: True or False? Do 47% of American’s pay no federal taxes? Sort of. It is true that about 47% … Continue reading

Why I Don’t Want A Big Tax Refund (and Neither Should You!)

tax returns, tax refund, tax preparing, tax return, federal taxes, irs

If you’re like the average American you’ll be getting a tax refund check for just under $3000 this year. For many people getting that big tax refund is the highlight of their year! I can understand where the feeling comes from. Let’s face it, it’s not often we receive money from the government. But what too many people don’t realize is that getting a big tax refund check each year isn’t a good thing. Here’s why… Can I Borrow Some Money? “Please? Just loan me $3000 and I’ll pay you back next April, I promise!” If one of your friends came up to you and asked that question, what would your response be? You’d probably tell them to get lost, in no uncertain terms. But by getting that big tax refund check from Uncle Sam each spring, that’s exactly what you’re doing. You’re giving the federal (and/or state) government an interest free 12 month … Continue reading