The formula for how much money you need to sock away for retirement is 80% of your pre-tax net income. This takes into account the fact that your living expenses decline when you don’t work, from transportation to wardrobe and eating out. However, what isn’t mentioned in this formula is that taxes are supposed to drop too, giving you a bit of a tax break from tax-deferred retirement accounts. When you were working, you might have been in a 28% tax bracket, but upon retirement, you may end up lowering that tax bracket due to a lower income. If you have planned for the same income though, you may find that’s not the case. To get the most bang for your buck in retirement, it becomes even more important to pick a strategy that includes reducing your tax burden. (more…)

If you haven’t jumped on the electronic filing bandwagon yet - that is, filing your taxes online in a paper-free way - then there are many good reasons to do so:

• You get your return faster - it can be as quick as two weeks, whereas the minimum time for a paper-based return is six weeks.
• You avoid mailing problems like your return getting lost in the mail, your tax check getting stolen, or any other kinds of delays. And you skip the line at the post office.
• You can do the filing at any time of day (or night).
• You avoid many mathematical errors because the e-filing software will pick up discrepancies; similarly, you don’t have to rely on data entry operators at the tax office to input your data correctly.
• You save paper and printing costs, and help the environment as well as yourself.
• You’re less likely to miss deductible items if you follow question by question formats in tax filing software.

While some people still are unsure about the security of sending this kind of personal information online, in reality, it’s probably safer than having pieces of paper everywhere with the same information on. Try e-filing for this year at least and see if you like it better.

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Unless you’ve got an extension, you’ve probably filed your tax return for 2008. Like many Americans, you might have missed out on some deductions simply because you weren’t aware of them – it’s a complicated system! So take a look at this list and keep in mind that some of these deductions might be available for you when you next file a return.

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If the value of your property has fallen, you’d expect that your property tax bill might fall too, right? Unfortunately this is usually not automatically the case but it certainly pays to check into how much property tax you really should be paying, because you might end up saving up to 20%.

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Scary stuff from a recent CNN report about the inevitability that taxes will rise: Janice Revell from the Money Magazine is sure that taxes have been cut too much, too quickly and historical analysis makes it look like this is a situation that can’t last. She thinks proof is there even as recently as 1980 when tax rates for the top tax brackets were double what they are today. (more…)

Celebrities don’t like to pay taxes anymore than the rest of us do. And just like us, they have to pay up when they get caught trying to keep money out of the taxman’s hands.

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As taxpayers scramble to get their tax returns together and forms filled out, it’s inevitable that some just won’t have time to file their taxes on time. It may be because they haven’t had time to get to the accountant or purchase tax software, or they may not have the funds to pay what they owe, but either way, if you for those that file late, late rebates are to be expected. (more…)

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Whether you’re trying to reduce your own personal income tax bill or trying to develop a business, there are different parts of the United States that you might like to move to, if you want to take advantage of the nation’s best tax-free havens. Here’s a list of some states that might meet your needs:

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credit: Beige AlertTo encourage people to buy environmentally friendlier hybrid cars, the United States government has been running some tax incentive schemes. If you are one of the people who bought a hybrid car expecting a tax credit of up to $3,000, it might be a shock to find out that you may not get all of this credit after all.

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