Rethinking the Tax Refund

rethinking the tax refund Everybody loves a tax refund.  But as good as it can feel to get a fat check from Uncle Sam; the best strategy for maximizing your dollars in many cases is to minimize your tax refund. A tax refund typically means you have been paying more than the appropriate amount of income tax to the U.S. government over the course of the year, providing Uncle Sam with what amounts to an interest-free loan directly from your paycheck in the form of withholding.  The tax refund essentially is the government repaying you for the loan.  Trouble is, not only can’t you charge Uncle Sam interest for the right to borrow your money; you’re also losing the opportunity to put that … [Read more...]

Six Tips for Tax-Smart Charitable Giving

tips charitable givingWhen done the right way, charitable contributions can lower your tax bill. Of course, this only applies if you itemize your deductions.  If you take the standard deduction, you're not eligible to deduct charitable contributions from your tax bill. Here are some key pointers in giving to charity while also reducing your tax burden. 1. Audit the charity. This tip isn't even tax-smart - it's just the first thing you should consider in giving, and a way to ensure that your money is going to the right cause. Guidestar keeps records of a charity's actions so philanthropists can audit them for their legitimacy, impact and finances. Sign up for a free account and you … [Read more...]

Five Red Flags of Tax Returns

red flags tax returns In March, Vermillion Financial Advisors prepare their clients for the upcoming tax season. We would like to provide you, our readers, with an article to supplement you in the preparation process of your taxes! Audits normally total just over one percent of total tax returns filed, with big income and very low income earners more likely to get flagged. You may have heard that the government needs revenue, so audits are expected to increase. Let's look at five red flags to keep in mind when preparing a tax return.       1. Unrealistic Deductions For the typical tax return, the IRS is interested in seeing deductions in line with other … [Read more...]

Investing Through Life’s Stages

investing through life's stages Investing is a lifelong process. The sooner you start, the better off you'll be in the long run. It's best to start saving and investing as soon as you start earning money, even if it's only $10 a paycheck. The discipline and skills you learn will benefit you for the rest of your life. But no matter how old you are when you start thinking seriously about saving and investing, it's never too late to begin. The first part of a successful lifelong investment strategy is disciplined savings habits. Regardless of whether you are saving for retirement, a new house, or just that extravagant dining room set, you will need to develop rigid savings habits. Regular … [Read more...]