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We were floored when she told us about that cumulative 5000 a year on those accounts. Tho, I suppose the idea is already in place in the US with the RothIRAs. Sounds very similar. Anyway, a no-brainer for those with the cash.
And yes, stocks are doing well right now Blue. We've seen 40 - 100% returns on certain things. Good job getting in there & good luck!
Miso, this explains IRAs. I'm not a banking expert (duh) so Blue might know more, but the general principle of contributing so that you can reduce your taxes owing is a good one. I can't think of many scenarios where one *wouldn't* want to do this, unless you are paying off some high interest debt. Even still, there are other ways to deal with that (e.g. consolidating into a lower interest loan).
Pity about GrkS. He'd be the expert on this. Probably up to his eyeballs in tax returns right now.
[url]http://banking.about.com/od/investments/a/ira.htm[/url]
has anyone seen "Zeitgeist?" ... it claims that there is no real law stating you have to file your income tax ... not that I'd know for sure ... I haven't had taxable income since 2005 ...
We've been trying to get an actual copy of the tax code for years now. We don't object to taxes per se, but we want to know what gives the government the right to take any taxes owing quarterly. Or, for employees, off each paycheque.Quote:
Originally Posted by tooxshort [Dear Guest/Member you have to reply to see the link.click here to register]
Why should they get the benefit of all that interest?
Thus far, we haven't been able to get an answer from anyone on this. I suspect its b/c there *isn't* a law. Someone just recently took the government to court and won (I forgot exactly about what) but I'll look for it. Its like everything else, tho: one has to be wealthy enough to have the time & money to be able to fight the fight.
last year i asked gskorp about all this and he wrote ten pages of stuff that i did not understand at all.
anyway, the ira is okay but you don't see that money for a long time. plus i know people who had their money in ira's who are old enough now to get it out and it ain't worth shit!
my sister gave me a good idea and said i should amend and deduct more stuff.
i've decided that i don't need an accountant but i need a friend who knows their shit and can give me advice.
When I started my business years ago, I took my stuff to an accountant after the second year just to make sure I was doing everything correctly. Its worth the money & you'll learn stuff. You don't have to keep using them, but I really recommend that one-time check for a small business. I've been audited (no fun) but b/c I had done this, nothing changed except the inconvenience of it. And the fact that I got used as someone's justification for *their* paycheck. Still, that's the system we got & the price you pay for being your own boss.
Re: IRA. You *do* see that money, immediately in less tax owing. Plus you know you are saving for retirement. Not everyone lost tons of money in the recent financial bust. Only those who were improperly invested lost everything. Too many folks were assuming the market we've had the past decade was normal & could be counted on, even tho financial experts have been consistently saying otherwise.
i have a serious mistrust for accountants.
what about cd's? would those be deductible?
They should be, if CD = GIC (Canada). Provided they are within an IRA. I'm unsure of the US equivalents but most of the same products exist.Quote:
Originally Posted by misombra [Dear Guest/Member you have to reply to see the link.click here to register]
An IRA is just a type of account that is designated as Tax-Free. There are many kinds of investments you can make from this account with various levels of risk/return: guaranteed investments (like CDs), mutual funds (tanked right now), stocks (with the right kind of account).
In other words, you can buy a CD, or shares in a mutual fund, and have them be either tax-free (IRA) or not. The difference being that any money you make off the non-IRA investment has to be claimed on your tax return. The upside is that you have that money in-hand.
If you don't like accountants, at least ask at your bank to speak to someone who can help you with these questions. They will match your investment risk profile with the various options & can set up an automatic payment plan. You are young, so there are plenty of options for you.
Okay, hope this helps. Back to work. ;)
Mmmm...Accounting.
*smacks head into table*
so everybody knows i was well fuked on tax day. so i decided to hire an accountant. i meet with her next week. a lot of people i work with use her and everybody tells me she's really good. one of the therapists i work with says she paid 50 bucks in taxes this year, and she makes much more money than me.
so she said i must see an accountant, unless i'd like to be screwed next year too. she said something about becoming incorporated. don't know much about that but we'll see what the lady says.
i'm so nervous. it's like a first date or something!
Mis, don't worry. The good thing about being self-employed is that any mistakes can be corrected in subsequent years. So, if there are any expenses you could have claimed but didn't, you can carry back to get some of last year's taxes back. I don't know the exact rule in the US, but you can go back at least several years. And, if you max that out and *still* have unclaimed expenses, you can carry those forward to reduce your tax owing in the coming years.
With the financial crap-out, lots of businesses are doing this right now. This years losses are being applied to get back tax they paid in 2005/06/07. If your accountant doesn't mention this, she sucks, find someone else.
Incorporation is generally unnecessary unless you are making over 100K annually. Or you are in a high-risk business where you are likely to be sued & lose your personal assets. But, even then, incorporation doesn't necessarily save you. Its all about the lawyers and who argues the better case.
Good luck.