Money Management 101 Part 8

Money Management Tips

money management tips

We are discussing money management in our continuing series on developing a financial road map.  We will now cover protecting your assets. If you’ve missed any part of our series, you can catch up here.

Protecting your assets

         Taxes

Taxes.  Yuck.  It’s not a subject anyone wants to think about, but as they say “only thing certain in life is death and taxes”.  But there are legitimate ways to minimize your tax burden.  Questions to address:  how do you take advantage of legal tax deductions. Why a big tax refund is a mistake.  Should you use a professional tax preparer  or do it yourself?

Do your taxes easily, quickly and correctly with a computer tax software program. One that is particularly good is turbo tax You can easily import your financial data from a financial management program such as Quicken. There is an abundance of help tools, and the process itself is accomplished by a interview consisting of series of simple layman’s term questions concerning your financial situation. Great aid in taking care of a tough task.

Take advantage of all legal tax deductions that you are entitled to.

  • Health spending tax accounts lower your taxable income.  Use them to pay for contact lenses, doctor co payment, insurance deductibles and weight loss programs.  See box below for details
  • Child Care costs thru Dependent Care Flexible Spending Accounts (DCFSA)(this could easliy save you $900/yr if you’re in the 28% tax bracket)
  • Mortgage interest on property
  • Property Taxes
  • Don’t have a small business?  Did you know that a small business can help shelter a portion of your other income from taxes.  You can legitimately take deductions for many of the things that you would just pay out of pocket for your household.  Learn some ideal small businesses you can get started in. 

It’s never too early to start getting ready for tax season.  Label folders for receipts papers, check stubs, statements that you’ll need for taxes.  File on a regular basis throughout the year.  Come January you’ll all ready to go.

 

Continue to Part 9 – Insurance 

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