Brace Yourself: It’s Almost Holiday Season

Can you believe Thanksgiving is less than a week away? We all love the holidays, but they certainly don’t make themselves. Making the holidays memorable for your family takes a lot of work, and with that work comes a hefty amount of stress. The Glass Hammer.com posted a great entry with advice on how to have a relatively "frazzle-free" November and December.

1. Start Planning Your Calendar Now

True story: For a few summers in college, I worked at a large craft supply store – working the register, designing store displays, and stocking merchandise. Mid-July every year, as soon as we packed up our Independence Day craft supplies, up went the DIY Christmas ornaments and decorations.

About half of our customers complained – it’s too early! But the rest of them jumped on board. While these overzealous crafters maybe had too much time on their hands, we can learn something from them.

Start planning your calendar for the next two months now. That way, you won’t double book yourself. Or if you do, at least you won’t be caught off guard. If your December work party, your partner’s office holiday drinks, and your kid’s winter play all fall on the same evening, it’s best to know now, right?

2. But Don’t Get Too Serious

There’s a not-so-fine line between being prepared and being inflexible. Acknowledge that the unexpected WILL happen. Staying flexible will help you maintain calm – both outside work and in the office. Everyone is stressed this time of year – and that means missed deadlines and last minute rescheduling. Keeping this in mind will help avoid some headaches.

Continue reading at The Glass Hammer.com...

Questions for the Tax Lady: December 21st, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: I have a small business with a few employees. If I throw a holiday party for them can I write off the expenses?

Yes, the IRS will let you deduct all expenses related to throwing a holiday office party. You could also deduct the costs of presents for your employees, as long as you do not give out cash or items easily exchangeable for cash, such as stocks.

Question # 2: What are some last minute ways to lower my taxable income for the year?

There are lots of quick ways you can lower your taxable income without leaving your computer. First of all, you could make a charitable donation. The Hannah Rose Foundation, a cause near to my heart, accepts donations online. Just remember to print out your receipt. You could also make an extra mortgage payment, or order energy efficient appliances online. For a list of 10 ways to lower your tax liability in under 10 minutes, check out this article on the RDTC Tax Help Blog.

Questions for the Tax Lady: December 7th, 2009

Check out the following new Questions for the Tax Lady answers and feel free to ask me questions through one of the links below. You can send me an email, direct message or @ reply, and I will do my best to get an answer for you!

Question #1: My boss usually gives me a present for the holidays, but this year she gave me a bonus check. Will I need to include these funds on my next tax return?

Yes, any cash gifts or items that are “easily exchangeable” for cash that you are given by an employer should be reported to the IRS. However, since your employer printed you out a check then odds are that she intends to include it on your W-2 form, but if you want to be extra cautious then you can always ask her. For more information on the tax implications of holiday presents from employers check out this entry on the RDTC Tax Help Blog.

Question #2: What is the 2009 standard deduction amount?

According to this IRS press release, for the 2009 tax year “the new standard deduction is $11,400 for married couples filing a joint return (up $500), $5,700 for singles and married individuals filing separately (up $250) and $8,350 for heads of household (up $350). Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.”

10 Holiday Season Tax Tips

The holiday season is in full swing, and while your children’s heads may be filled with visions of sugarplums, yours is probably full of nightmares about the upcoming tax season. The holidays are expensive, and while hitting up the sales rack may save you a few bucks, the real savings this time of year come from strategic tax planning. Although most of us would probably prefer to be out in the snow than inside worrying about Uncle Sam and the IRS, you may be surprised to see how much money holiday season tax planning can save you.

1. ‘Tis the Season to Give

We all know that making a charitable donation can help lower your tax bill. Unfortunately, many families have cut back on charitable contributions this year because of the economy. However, after you review your financial documents you might need to make a few more donations to keep your tax liability low. The holiday season presents many excellent opportunities to give, from toy drives to coats for kids campaigns. Just be sure you are donating to a qualified charity, otherwise you might not be able to claim the deduction.

2. Purge & Organize Records

Getting your tax records organized before New Year’s Eve could be very beneficial in your tax planning efforts. Set aside some time to go through all of your financial documents and shred anything you no longer need. Then, you can calculate your total tax liability and determine if you need to take any last minute actions to reduce your adjusted gross income or increase the benefit of a tax credit.

3. The Office Holiday Party

Small business owners may get carried away while planning a seasonal party for your valued employees. Luckily, the IRS allows business owners to deduct some costs for parties and holiday gifts for your employees.

4. Gifts from Your Boss

If you work as a wage earning employee, then you might be getting a holiday or end-of-year gift from your employer. Most small gifts will not have tax implications. However, if your boss gives you a cash bonus, then you will have to claim it as income on your tax return.

5. Pay the Doctor

If you fell getting off the bunny slope, or threw out your back hanging Christmas lights on your house, then you may want to pay those medical bills sooner rather than later. If your yearly medical expenses exceed 7.5% of your adjusted gross income, you can deduct the expenses on your tax return. If your current expenses are a little shy of the deduction threshold, buying a new pair of glasses or an extra prescription could help reduce your tax liability.

6. Defer Now, Save Later

Self-employed taxpayers and small business owners may be able to defer some income until next year. Simply hold off on sending out a few invoices until after Christmas. This can reduce your taxable income for 2009 and give your clients the gift of more time to pay. Remember, this simply pushes the income off until next year, so this is not the best move for everyone. Wage-earning employees generally cannot take advantage of deferred income.

7. Smart Savings

If you have an IRA or retirement account that allows you to make tax-free contributions, then you check to see if you have maxed out your contributions for the year. If not, making a few extra contributions in December is a great way to lower your taxable income.

8. Look at Losses

In between shopping and decorating for the holidays, you should also take a few minutes to look over any stock market gains or losses for the year. If you have an especially high net capital gain, it might be beneficial to sell some stocks before the New Year begins. Capital losses can offset any capital gains, and you can deduct up to $3,000 in losses against regular income. Of course, you should never sell an investment for tax purposes alone, and you should speak with a tax professional.

9. Give Yourself an Extra Mortgage Payment

Although money is usually pretty tight around the holidays, if you can find a way to make an extra mortgage payment before the end of the year, you can save money on your taxes. Mortgage interest is 100% tax deductible, and the deduction is claimed when the interest is paid, regardless of when it was due.

10. The Un-welcome Gift Tax

If you are feeling extra generous and intend to give a large sum of money to a child or relative for the holidays, remember that the IRS taxes gifts over $13,000 per year (as of 2009). Speak with a tax professional if you need guidance on avoiding this nasty tax. Alternatively, the IRS does not place limits on funds used to pay for someone else’s education or medical expenses, and what better gift could there be than health and education?

10 Easy Ways to Save Money this Thanksgiving

With the holiday season just around the corner, millions of taxpayers are looking for ways to save money this Thanksgiving. Between travel expenses, food and supplies for a huge dinner, and other expenses, the total costs for “Turkey Day” can add up quickly. To help my readers have a fun-filled Thanksgiving without breaking the budget, I have put together the following list of ways to save money this year.

1. Be the Early Bird

If you are hosting Thanksgiving dinner for your family and friends then you can benefit greatly from planning your meal and purchasing supplies as early as possible. This way you can be on the look out for discounts on non-perishable products. You can also avoid the huge crowds of last minute shoppers.

2. Request RSVP's

While having some extra turkey and stuffing leftover to make sandwiches can be fun, having TOO many leftovers because of no-shows is basically like throwing money in the trash. By asking your guests to RSVP ahead of time you can get a better estimate of how much food you should buy.

3. Coupon Clip

Food companies know that people buy extra food around Thanksgiving and often print especially good coupons. Even if you are not the “coupon type,” you might be surprised to learn how much you can save this Thanksgiving just by using a handful of coupons. You should also be on the look out for groceries that offer discounts on holiday related products.

4. The Thanksgiving Turkey

The Thanksgiving turkey can easily become one of your biggest expenses, depending on the size of the bird you select. Frozen turkeys are usually a little cheaper, but can take longer to prepare due to the necessary defrost time. Also, be on the look out for stores that offer specials on turkeys. Many will even give you a turkey for spending a certain amount of money. If you can plan it so that you purchase all of your supplies in one trip then you may be able to get a free turkey.

5. Do NOT go Overboard

Although it can be easy to get carried away and create a lavish meal with dozens of sides and desserts, do you really need to? Odds are that most of this extra food will go uneaten and find it’s way to the trashcan. Instead, limit the number of dishes you create and focus your attention on the Turkey.

6. Discount Decor

Another easy way to drain your bank account is by going overboard with decorations. However, there are several ways that you can decorate your Thanksgiving table for little or nothing. Try using dried leaves and pinecones to create a season centerpiece. If you do not have any trees with pretty enough leaves, then you could make them out of orange and brown colored paper.

7. Drink Decisions

There are so many yummy fall beverages that it can be hard to choose between them, and you can very quickly spent too much. Save money by making your own eggnog and cider at home. Search for easy recopies online, and be sure to read the reviews to make sure that they come with good recommendations.

8. Perhaps a Potluck?

If hosting a big Thanksgiving dinner seems like too much, then you can always suggest a potluck to your friends and family. Everyone loves a potluck, and it can save you a decent amount of money if you are supposed to host the dinner. It will also allow you to focus your attention on other tasks, like creating festive decorations.

9. Traveling Tips

If you are traveling for the holiday, then the sooner you book your flight the better. The day before Thanksgiving is the busiest traveling day of the year, which usually results in huge crowds and delayed flights. In addition to buying your tickets early, you could also try arriving a day or two early to avoid the day before Thanksgiving ticket mark ups. If you have enough time, you could even try driving to your destination.

10. Have a Heart

One of the easiest ways to save on Thanksgiving dinner is not to have one. By replacing your family’s meal with something cheap and donating the turkey and fixings to a local charity you can get into the holiday spirit and get a valuable tax deduction. Just be sure to keep your grocery receipt, and make sure you are donating to a qualified charity.

10 Tips to Save Money this Holiday Season

Holiday spending can snowball into quite an expense if you do not keep good track of your funds. However, there are plenty of ways to save extra cash and stay out of the red this season. To help the readers of my blog learn some seasonal frugality and still have a great holiday, I have compiled this list of 10 tips to save money this holiday season.

1. Re-Use Decor

It is okay to buy a few new decorations, but why re-buy everything when you can simply re-use last year’s decor? The great thing about decorating is you can always make something old look new by presenting it in a new way. You could use some of last year’s ornaments as a table centerpiece with some new holiday ribbon around it. Or, you could use garland and decorations to create a festive wreath. There are thousands of ideas on recycling holiday decor online, easily accessible by a quick Google search.

2. Know What to Buy

By now it is probably a good idea to have a gift list made so that you know exactly who to buy for. Try listing multiple gifts possibilities for each person, so you more to choose from and more flex on your budget. This will give you extra time to sniff out the best deals, and you will have the hardest part done: choosing what to get everyone!

3. Shop Online

Shopping online has it is ups and downs, but if done right it can save you lots of money. If you buy multiple items on one site, you can receive discounts or free shipping. Also, shopping online has the benefit of being able to compare prices with other stores (PriceGrabber.com) almost instantly, guaranteeing you the best price.

4. Clip Coupons

Do not be afraid to take advantage of every discount you can get. Taking the time to get a few newspapers and coupon magazines will pay off big time in the end. Some new businesses even put out coupons for 25% off your purchase and other amazing deals that are perfect for holiday shopping. You can even find coupons online to print, and discount codes for online purchases at many stores, on sites like FatWallet.com

5. Make Gifts

Buying something special for close friends and family is fine, but for coworkers and friends you hardly see, try making gifts. There are thousands of ideas online for gift "projects" you can do that are very affordable and easy to complete. Additionally, if you make the same gift for everyone you can buy the supplies at once for bulk savings.

6. Plan Travel

One of the biggest expenses for the holidays can end up being travel costs for flying out to see family or friends. If you are going to be flying or riding a train this holiday season, look into tickets ASAP, as they are not likely to get any cheaper from here on. Compare prices at multiple sites to make sure you're getting the best price, and if you are planning to stay at a hotel then you might want to consider a travel package, which is often much cheaper then purchasing everything separate.

7. Make Gift Wrap

Although it’s pretty, wrapping paper has gotten so expensive these days. To save some cash on this front, try making your own gift-wrap! One way is to buy a large roll of regular brown package paper and use holiday stencils or stamps to decorate it. Top it off with a ribbon and a hand-made gift tag, and you have a beautifully wrapped present for a fraction of the cost.

8. Frugal Food Shopping

Throwing a dinner party? Plan ahead and think about what you will be serving and how much. When throwing a holiday party for friends it is easy to get carried away with food and décor, so by making a concise list and budgeting well you can stay on track. Another great way to save on holiday parties is to make them a potluck, so that you do not have to purchase all the food yourself!

9. Save on Crafts

It is a great idea to make holiday crafts with your family, but there is no need to run to a craft store and buy expensive products. There are plenty of crafts you can do with things you already have, or sheets you can print offline. Kids will love making snowmen out of marshmallows, creating their own gingerbread house out of graham crackers, or just coloring in some free printable holiday coloring sheets.

10. Keep Track!

Create a holiday budget, citing expenses for your Christmas tree, gifts, food, decor, and any travel or other expenses. Then, while you are doing the actual shopping, write every expense down, including online purchases. This way you know you will not go overboard and can start the New Year without any post-holiday spending blues.