Smart On Money

Personal finance topics including budgeting, debt reduction, investing, income creation and saving.

Main Menu

Archives for 2013

Looking for a Boost to Help You Pay Down Debt? Join the Debt Movement!

By 1 Comment

One of the hardest things about getting out of debt is the fact that sometimes you feel as though you are all alone. After awhile, you begin to feel discouraged, and you suffer from the lack of support.

If you want to succeed with your debt pay down goals, you need support and help. And if you really want to kickstart your current efforts, a little enthusiasm helps. Jeff Rose, the blogger behind Good Financial Cents, is becoming quite well-known for his financial movements. And right now he is in the midst of the Debt Movement, an effort to get consumers to collectively pay down $10 million of debt in 90 days.

Join The Debt Movement

the-debt-movementYou can join the Debt Movement at any time in the next 90 days, but the earlier you join, the more progress you will make. Jeff has teamed up with ReadyForZero, which can make it easier to order your debts, make a pay down plan, and track your progress. Joining the Debt Movement can connect you with hundreds of others working toward their goals of debt pay down, as well as provide you with the motivation you need to keep it going.

On top of gaining access to education and community resources, as well as helpful and practical tips, the Debt Movement is also offering scholarships. Some of those who participate will receive debt scholarships designed to help them turbo-charge their efforts. However, you can't get access to the scholarships if you don't sign up and participate. And, even if you don't end up with one of the scholarships, you are still likely to make notable progress during the time of the Debt Movement.

Build Wealth, Not Debt

The reality is that debt is a drain on your wealth. When you are paying interest to someone else, you are sending your own money out of your control. You aren't able to direct your financial resources in a way that results in more wealth for you. Debt can place strain your relationships as well as on your pocketbook. Getting out of debt is the first step toward financial freedom.

Think about your finances. Are you over-leveraged? Do you have too much debt? Do you wish that your money could go to improving your life, rather than just paying interest and other obligations? One of the best things you can do is make a plan that allows you to get rid of your debt as quickly as possible. Think about how much you can spare to set aside for debt reduction, and take the plunge.

Joining the Debt Movement can be a great way to boost your efforts. You'll find a supportive community that can help you stay focused on the goal. Plus, you can receive practical tips and strategies for paying down your debt faster so that you pay less in interest overall. Think about joining the Debt Movement and tracking your progress. You will have more of your own money at your disposal, and you will be well on your way to financial freedom.

What To Know About the Taxes Of The Self-Employed

By 1 Comment

Being self-employed gives you the opportunity to work for yourself and control your income. But if you’ve always worked as an employee, becoming an independent contractor or business owner changes the way you complete your taxes.

Before, your employer deducted taxes from your paycheck and paid a portion of your Social Security tax. Those days are over, and you’re now responsible for your own tax bill. Although most self-employed people do owe the IRS at the end of the tax year, understanding various tax breaks can help you get a refund.

Reporting Your Taxes

Single and joint tax filers with no dependents or business deductions can file a 1040 EZ form. This is the simplest tax form to complete, in which many filers are able to file their own taxes. As a self-employed person or an independent contractor, you’ll need to report your gains and losses on a 1040 form. Throughout the year, keep accurate records of your earnings as well as deductible business expenses. Two additional tax forms are associated with the 1040 form. You’ll use a Schedule C to report your business income and expenses, and a Schedule SE to determine your Medicare and Social Security tax. Due to the complicated nature of this particular tax form, hire an accountant to handle your income tax preparation.

Biggest Tax Items

You might put off starting your own business due to tax fears. However, there are several deductions and tax breaks to help lower your tax liability.

1. Self-employment tax deduction. This is an extra tax in addition to your income tax. This is how you pay Medicare and Social Security taxes. For some, this extra tax discourages self-employment. However, the IRS views self-employment tax as a business expense, thus allows self-employed people to deduct half of this expense from their income.

2. Home Office. Regardless of whether you rent or own your house, if a room in your house is used exclusively for business purposes, you can take a home office deduction. Provide your income tax preparer with the square footage of this space and he’ll calculate your deduction. With the home office deduction, you’re also eligible to deduct a percentage of your property taxes, utilities, homeowner’s insurance, mortgage and home maintenance expenses.

3. Health insurance premiums. If you’re not eligible for health insurance through your spouse’s employer, you can deduct the total of all premiums paid for health insurance, dental care and long-term care.

4. Meals and entertainment. If you meet a business associate for a meal, or take a client out to lunch, keep accurate receipts. These are common business entertainment expenses and you’re eligible to deduct 50% of these expenses.

5. Interest on loans and credit cards. Did you take out a business loan to start your business? Do you have a business credit card used exclusively for business expenses? Interest incurred on a business loan or business credit card is tax deductible.

Not familiarizing yourself with eligible tax breaks can result in a higher IRS bill. Speak with a tax professional to learn your options. The ability to reduce your tax liability can take the stress out of self-employment.