Making the Right Decision for Your 401k Investments is Important

One really important thing to remember about your 401k investments is that the IRS, through the tax code 401k, will give all qualifying employees an immediate tax reduction along with an upside market potential for your savings. So, with that information alone it’s something you really should consider taking advantage of.

When thinking about 401k investments you should figure out how much of your gross not your net income that you can save by following the current limits that are set by the IRS. You should sit down and probably talk with a benefits counselor as well. Your company will have one or they should at least be able to get you the information that you need so you can set up your retirement account.

Before you do anything else you need to study the various savings as well as investment options that are available for you, this is generally going to be mutual funds. Then you can determine how you are going to want to have your regular contribution dispersed into those options.

If you feel like you need more information, find out when an investment adviser might be coming to visit your place of employment so that you can get more in depth information on certain kinds of investments. A really important thing to find out is if your account is portable and if so how much can you take with you. You will also need to find out when you will be vested.

You might want to visit your library as well and go up to the reference librarian and find out where you can find the most current resources that might give you information on the different investment choices that you have available to you. If you don’t want to do that you can always look this kind of information up on the Internet.

Once you feel comfortable with your 401k investments then you should go in and sign all the needed paperwork so that your contributions can start to be deducted from your paychecks each time you are paid.

Seven Great Ways to Get an IRS Audit.

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If you really, really want an audit, the following list will show you exactly how to get one:

(1) Get Paid in Cash – If you’re a waiter or waitress, market trader or professional gambler, then you get paid in cash a lot. To the IRS this means you have an opportunity to hide some of that cash. This makes you a more likely target for an audit.

(2) Get Yourself a Bank Account in Another Country – Nothing makes them more keen on going through your finances than you stashing some of that lovely money in a foreign country. People with overseas accounts tend to be quite well off and they will want to know why those riches are going somewhere else. New rules make foreign accounts easier to access for the IRS so don’t think you can hide it!

(3) Become Successful – Earn over $200,000 and you are more than 50% more likely to be the recipient of an audit.

(4) Become Unsuccessful – If you file a loss on Schedule C as a self-employed worker for your first year they’ll understand. Do it year on year and they’ll get suspicious. Either you are really bad at business, or you are deducting a little too much for their liking.

(5) Be Like Robin Hood – If you are too charitable, to the point where your donations are matching your income levels, they may want to take a look at why you’re so darn good and wholesome. 80% donations will be a huge red flag.

(6) Round ‘em Up – If all the numbers in your deductions and income columns are rounded and neat numbers like $1000 or $15,000 then they might start to wonder if you are rounding up or down. Even if you are rounding in their favour, they’ll still want to check those books.

(7) Moving that Money – If you move large sums from your business accounts to your personal accounts then they will come knocking at your door. Banks are under obligation to tell the IRS if you receive deposits in excess of $10000.

Alex is a freelance journalist and financial blogger. He loves to write about baseball and jazz but spends most of his days writing about mortgages, credit cards and umbrella companies .

Don’t Get your Refund Early

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With tax season coming up, many people are already planning how they will spend their tax refund. In order to get more people coming through their doors, accounting companies are promising to give you the expected refund on a secured credit card as soon as your taxes are filed. In these hard times this is a tempting offer. After all, who couldn’t use a little extra money during these economic times? Although you may be tempted by these claims, there are a number of reasons why you shouldn’t be depending on this type of refund anticipation loan to pay off your bills.

By using this refund anticipation loan instead of simply waiting for your refund check to be mailed to you, you are looking at losing money over the long term. The amount of fees that come with using this “Emerald Card” are staggering. Unless you are in significant need of your tax refund right away, there is a lot of benefits to simply waiting a little bit longer to receive your money. Unless you are about to file for a Minneapolis bankruptcy and are advised to take this type of loan by a Minnesota bankruptcy lawyer, you should consider the number of fees that are included with this type of loan.

There are a number of fees associated with using an Emerald Card to collect a refund anticipation loan. Each time you want to use your Emerald Card at the ATM there is a $1.50 fee that will come out of your tax refund anticipation loan. You may think that you can get around this fee by simply walking into your bank and talking to the teller. However this does not work either as there is a 1.5% fee on any withdrawals that are taken out. These are only a smattering of the fees that come with accepting a refund anticipation loan. Although it may be necessary for some who are truly desperate for the money, in the majority of scenarios it is a much better idea to simply wait a few extra weeks and allow the government to mail you a check for your refund.

Prepaid Debit Cards for Income Tax Refunds

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Don’t look now but prepaid debit cards are making their way into our income tax system. Several State Governments and now the Federal Government are experimenting with ways to refund taxpayers directly to reloadable debit cards instead of the usual tax checks. I guess we shouldn’t be surprised.

For a few years now several government agencies on all levels – all the way down to the county and municipal levels – have been trying feverishly to cut costs. Well, it turns out that one of the more expensive things they do is cut checks in order to pay out benefits and tax refunds. And they can save a load of cash by switching over to debit cards.

A prepaid debit card is a natural for these kinds of transactions. The agencies don’t have to pay for the cost of producing or distributing the cards because many prepaid card companies are more than happy to do that. The companies foot that bill because they’re able to put their product in the hands of lots and lots of new customers. The prepaid companies figure that many of these new customers will end up being repeat customers so they stand to gain some long-term business. It’s a big win for them.

And of course it’s a big win for the government agencies too. They save a lot of money because their processes get more streamlined. Plus, they’re able to do it all more quickly too. That’s why you’re seeing such things as unemployment benefits, railroad pension benefits, and more being distributed via prepaid cards.

It’s even a win for the citizens who receive the refunds. That’s because each government agency is usually able to cut a nice deal with the card companies so the refund recipients pay no fees on the cards – so they get the cards for free. And the cards are immediately usable so there’s no check cashing necessary. It’s a pretty sweet deal all around.